Don't Understand vLookup reference

I've attached a sample worksheet from a free online tutorial. The exercise was how to use IFERROR and VLOOKUP together. I understand the concept, BUT I don't understand how THIS spreadsheet works. I wanted to reach out to the person who created the spreadsheet and posted it, but I cannot find contact information for him anywhere.

I absolutely cannot figure out how one of cell references works in this spreadsheet. I keep thinking that the two tables have to be linked in some way. But, I've tried looking at the formats and cannot see any indication of how they are linked. If they are NOT linked, I don't have any idea how the cell reference works in this scenario.

If someone has time, could you take a look at the attached spreadsheet? I've made some notes on it. It is too convoluted to explain it in the body of this email.

Oh, and I'm using Excel 2016, if that makes any difference to anyone.

Thanks, Diane