No calculations are done. The contents of sheet B are used as definition files for two numeric formats (formobs. and formrat.).
The dataset B (imported from Excel, as I guess) has two format definitions side-by-side. The data step splits that vertically into two datasets, one from the columns 1&3, the other from columns 2&4. Both datasets contain the same columns due to the respective drop= and rename= dataset options.
These datasets now have a structure that allows their use as input files for proc format.