1. AND the low 16-bits of H against the high 16 bits
2. Take the resulting 16-bit number and OR the low 8 bits against the high 8-bits
3. Take the resulting 8-bit number and OR the low 4 bits against the high 4-bits
4. Take the resulting 4-bit number and OR the low 2 bits against the high 2-bits
5. Take the resulting 2-bit number and NOR the first bit against the second bit
6. do bitwise AND of the resulting 1-bit number against the nonce
7. take the result from #6 and XOR the low 16-bits against the high 16-bits
8. take the resulting 16-bit number from #7 and OR the low 8-bits against the high 8-bits
9. store the result by doing output[OUTPUT_SIZE] = OUTPUT[result of #8] = nonce
Steps 1-5 create a single bit indicating if the nonce meets H == 0. When you bitwise AND this against the nonce in step 6 you will get 0 for any invalid nonces and for valid nonces you will just get the nonce again. (1 AND X = X)
I don't claim to understand this, but step (1) should be an OR, not an AND.