If you have a categorical feature that can take many different values (on the order of 10e3 or higher), where each value only appears a few times in the data, it becomes impractical and ineffective to index and one-hot encode the feature values. Instead, it can be a good idea to apply the "hashing trick": hash the values to a vector of fixed size. This keeps the size of the feature space manageable, and removes the need for explicit indexing.