You are obviously not experienced at reading batch files
The bat file assumes that relative to where it is located on the USB disk you have the following sub-folders:
config
calibre
calibre-db
The
config folder is where calibre is going to store its private config information; the
calibre folder has a copy of the calibre binaries (in effect a copy of what is normally installed to C:\Program Files\calibre); and the
calibre-db folder is where the calibre database is located.
If you want a different folder structure you can modify the .bat file accordingly.
You would normally navigate to the .bat file on the USB stick using Windows Explorer, and then double-click/open the batch file to run it.