LOOKUP logic/usage behind a specific "problem"

Hello,

I recently came across some Excel tutorial videos on YouTube and found a formula usage that I can't figure out the logic behind.

In the attachment you can find the formula: Excel_Functions_Engineers_XelPlus.xlsx
The usage of this formula is to return the "immediate parent" of certain part numbers.

The user uses the following array formula: =LOOKUP(2;1/($A$2:A3=A3-1);$B$2:B3)


Can you please explain to me the logic behind this formula usage? Why is it searching for the number 2 and how does the division by 1/($A$2:A3=A3-1) work?


Thank you in advance.