The formula first uses the ISNUMBER function to test if the value is a number, and applies a simple logical if so:
For any number less than the value in "input", the formula will return TRUE and the conditional formatting will be applied.
However, if the value is not a number, the formula then checks if the first character is a less than symbol (<) using the LEFT function:
If so, the MID function is used to extract everything after the symbol:
Technically, the LEN function returns a number 1 greater than we need, since it includes the "<" symbol as well. If this bothers you, feel free to subtract 1.
The result of MID is always text so the formula adds zero to force a Excel to convert the text to a number. This number is then compared to the value from "input".