It will help to look at the values you're operating on.
If you go to Edit -> Preferences -> Add-Ons and enable Node Wrangler you gain a lot of functionality and keyboard shortcuts in the node graph. We're only interested in one of those functions right now, though. You can Ctrl + Shift + Click something to link its outputs to a viewer node and just see it in the viewport.
So if we take an object, like this extra long cone, and view it with this Mapping to Vector Math -> Length operation on it, we get this result.
Thanks to this visualization I can look at this and say this is essentially just wiping out the X and Y axes and then running an absolute value operation on the values, and I could rewrite it like this:
From here I hope it is easier to see what the Less Than node is comparing against. It completely transforms this map from a gradient to strictly either a 0 or a 1 at any position on the mesh. If the Value of this gradient is less than your defined threshold it reports a 1, otherwise it reports 0.
And so they're just using this method, animated over time, as the factor of a Mix Shader. This generates a hard cutoff between the diffuse shader and 100% transparency.