I think you followed how to do the paste command.
The sed command is replacing the pipe with a space and a pipe symbol.


> cat sfile1
name
nameabc
bcd
nameabcdefg

> cat sfile2
age
age1111
age2345
age6743

> paste -d"|" sfile1 sfile2 | sed "s/|/ |/g" >sfile3
> cat sfile3
name |age
nameabc |age1111
bcd |age2345
nameabcdefg |age6743