The delayed influx represents animals exposed one incubation period earlier who enter the infective individual compartment now. They die at the instantaneous rate once in that compartment. The displayed bookkeeping removes an animal from at the same delayed time that it enters , preserving .
For this bookkeeping, must include the exposed animals which have not yet completed incubation period. If were instead defined as strictly unexposed susceptible individuals, its loss term would be the current exposure rate and a separate latent compartment would be needed. The calculations here follow the printed delay differential equation. A full initial-value problem for a delay differential equation also needs a history on ; the following small-delay expansion of an epidemic transfer rate concerns a smooth compatible history and the regular regime assumed by the question.
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