Yep, “People/Friends & Family” is a folder, but you could use any other legal “from” constructs here like “#people” or whatever.
Disregard the “red bits”—this is just forum code formatting and doesn’t mean anything in this case.
The “choice” constructs are mainly to find if a birthday is already in the past for this year, and to construct different values for the numeric addition (it forms numerical pseudo-dates in the form YYYYMMDD and MMDD for the “birthday is in the past” comparisons).
Regarding the date(today): Yes, it calculates from “now”. If you’d need something else as a reference, like maybe the date part from the file’s title (in case of daily notes), you’d have to make careful changes throughout. And test a lot. 