The OUTPUT statement requests the statistics that you want to save in the output data set. In this case, you are requesting the mean statistic for each j, where j=1..600.
You might be more familiar with PROC MEANS than PROC SUMMARY. If so, here is an equivalent way to produce the 600 sample means:
proc means data=sample noprint;
by j;
var x;
output out=want mean=;
run;
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