It's more like a recipe (for functions).

The first example, I, is an identity function. It takes y and returns y.

The second, K, is a constant which takes X and y and returns x.

This gets more complicated as you go along. The idea is that you get rid of a lot of the syntax for composition and have it all be implicit by what you put next to each other (given APL programs are usually one long line of a bunch of different symbols all representing functions).