Redirecting means sending the content of the file into the command's STDIN.

cat's behavior is to read content of file in it's argument(s) to STDOUT. But if there's no argument, then the content is read from STDIN.

See that I write argument(s) there? It's because the number of argument can be 0, 1, or multiple.

in simple pseudocode, it's like this:

if number of arguments = 0
  print STDIN to STDOUT
else
  for each file in arguments
    print file content to STDOUT

Example 1:

cat a.txt

output:

HELLO

Example 2:

cat (then enter)

You will be able to type into terminal, when you click enter, the typed line is sent to cat's STDIN. Then cat will print line you just typed.

Answer

So when you type:

cat < a.txt b.txt

internally, it works like this:

• STDIN is filled with content of a.txt HELLO text
• $1 (first argument) is b.txt which is a non-existent file

based on behavior above, it will print content of b.txt alone since there is 1 argument supplied.

but it doesn't find file b.txt, so it outputs an error message.

when you type:

cat < a.txt b.txt a.txt

internally, it works like this:

• STDIN is filled with content of a.txt HELLO text
• $1 (first argument) is b.txt which is a non-existent file
• $2 (second argument) is a.txt

will output: (once again STDIN is ignored because there are 2 arguments)

cat: b.txt: No such file or directory
HELLO

More detailed explanation

• when you run command mycommand arg1 arg2 arg3, it means there are 3 command line arguments: arg1, arg2, arg3 respectively
• STDIN is standard input: data stream for sending input to a command. You can send data to STDIN like these (assuming the target command is cat):
  • echo "my data" | cat
  • make file called data.txt, filled with my data, save it, then use cat < data.txt