The older cord (US model shown) lacked a sleeve around the cable where it joins the female 2 pin connector and repeated folding or bending could fray it. There have been no issues and this is a precautionary recall.
Microsoft has issued full instructions here.
If you are affected apply online and discard the old cable as soon as you can. Any similar two pin cable (such as found on a printer) will work. Microsoft will post you a new cable. Details of the Australian recall are here.
Note this does not apply to the Surface 3 (uses a USB charger) and post March Surface Pro 3 and later Surface Pro 4 and Surface Book.