IP3out is a fictious output level where 3rd order products reach to the fundamental's level. 3rd order products rise 3 times faster than fundamentals(as the slops indicate) while you increase the input level.
D distance between two runners having velocities v and 3v closes in D/2v sec. In that time, the fundamental having velocity v takes D/2. As a result, output level(named as IP3out) becomes initial level plus D/2 as the formula states.