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I've seen some guys who actually had large amount of reputation, sometimes they're shown like that they're having only 1 reputation, with no badges at all.

Why is that happening?

Is that some error or can people choose to display their reputation as 1?

What's meaning of that?

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Why is that happening? What's meaning of that?

Those users you see with 1 rep are actually suspended for a certain time and for certain reason. You will see on profile page of those users a text like this,

This account is temporarily suspended for [a reason]. The suspension period ends on [date].

Reason and time can vary which you can see on the page I linked.

Is that some error or can people choose to display their reputation as 1?

No, it's not an error nor people can choose to display their reputation as 1.

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