root@server [~]# grep -o '/home/[Aa-Zz]*' /etc/passwd/home/deerlet
The blue pertains to the shell
The purple pertains to the command issued, in this case grep

root@server [~]# This part is the prompt message (visual clue). This part is setup by the shell you are using at the time of login. In the bash shell (for example) it is recorded in the environment variable $PS1. However, it can be influenced or modified by the variable $PROMPT_COMMAND. It can have literally any message.
You can see the values of these variable by issuing the commands:

Code:

echo $PS1

Code:

echo $PROMPT_COMMAND

In this case, by convention the interpretation means:
root : the name of the user currently using the shell, it can be set in PS1 with the alias short-hand \u, in bash
@ : at
server: host name logged in; it can be set in PS1 with the shot-hand alias \h in bash
space [~]: cosmetic look; the ~ represents the home path of the currently logged user; it dynamically changes if set in PS1 with a \w or \W
# : A symbol to represent the superuser at the helm. It is convention. A regular user might have the symbol % or $. But there's nothing that said that it has to be anything.

The grep command:
-o : a flag to make grep just output the matched pattern, instead of the line where found.
'/home/[Aa-Zz]*' : BRE (Basic Regular Expression) pattern, it is surrounded by single quotes to tell the shell not to try to interpreted the content and passed to grep as it.
[Aa-Zz] : Character class; The A and lower z are redundant since the range a-Z converts them. [a-Z] does the same.
* : Meta character; it means match zero or more of the previous character. Do not confuse with the shell glob (*) character that exist in the shell.

/etc/passwd/home/deerlet : path of the file that grep will read, in order to try to find lines that match the pattern previously mentioned.