In answer to the question....

The formula substitutes the nth instance of "/" with ^^ and then uses ^^ to determine starting point of string to return.

n is determined by LEN of string less LEN of string having had all instances of "/" removed

Consider:

A1 = "apples/pears/oranges"
Len of A1 is 20

Determine n
n = 20-18
18 being the LEN of A1 if you take out the "/"

We use n [2] as final argument within SUBSTITUTE call to determine which instance of "/" we wish to replace with "^^"
(when this argument is excluded [optional] all instances are replaced)

SUBSTITUTE(A1,"/","^^",2)

At which point A1 equates to: "apples/pears^^oranges"

To return "oranges" we return right n characters where n is determined by Len of string [20] less position of ^^ within revised string.

There are alternatives to the above but it's a fairly common approach.