If you mean a server that only plays single-player with no multiplayer interactions, that would defeat the purpose of LU.
Sorry i know this topic hasn't been replied to in 120 days but i figured i must say I think they mean synced single-player missions and peds. Basically multiple single player.
It's a really cool concept. Again I remember some guy on GTAforums was developing a multiplayer single player for GTA SA. He got pretty far, in fact i remember there was a vid showing police and pedestrians being synced as well as the first few missions working. It only allowed like 6 players max but it was pretty cool. Unfortunately he had a huge flame war with several staff members on GTAForums and got himself permabanned, so he gave up on it.
It's a cool concept but it's really, really hard since syncing pedestrians to EVERYONE requires a massive amount of data. Though, they managed to do it really well with GTA 5 Online, so maybe it's not as unrealistic as it once sounded.