Panic is not a rust-specific term, it generally refers to software halting intentionally because something has gone so wrong that you can’t reasonably recover. For example, some safety invariant is violated or core data is corrupted. Kernel panics (also called bug checks or BSODs in Windows, same concept) exist in all OSes by necessity.
When linux panics, it halts the machine - for fundamental things like data corruption detected, and we can't continue to operate and risk corrupting the disk. Just like Windows has the BSOD.