A BYTE contains 8 (usable) bits. In this context, a WORD contains 16 bits or 2 BYTEs. These can be represented as
+--------+--------+
2 BYTEs |bbbbbbbb|bbbbbbbb|
+--------+--------+
1 WORD +wwwwwwww wwwwwwww|
+--------+--------+
You can build a WORD out of 2 BYTEs. There is an upper BYTE and lower BYTE. The macro you describe does exactly that.