Conditional formatting is applied to all cells in the active selection at the time a rule is created.
In this case, the column references are locked to prevent columns from changing as the formula is evaluated, but the row references are relative so that row numbers are free to change. The result is a formula that applies exactly the same logic to every cell in the same row.
If COUNTBLANK finds any blank cells in a given row, it returns a positive number, which Excel evaluates to TRUE, triggering the rule.
If COUNTBLANK finds no blank cells, it returns zero, which is evaluated as FALSE, and the formatting is not triggered.