$OUTPUT is the global variable containing a pointer / reference to an instance (object) of the core_renderer class.
output.page_heading is the Mustache template form calling the method 'page_heading' in the core_renderer class on the instantiated object instance referred / pointed to by the $OUTPUT global. Because $OUTPUT has been parsed to the template in the template context as 'output'.
output.page_heading is the Mustache template form calling the method 'page_heading' in the core_renderer class on the instantiated object instance referred / pointed to by the $OUTPUT global. Because $OUTPUT has been parsed to the template in the template context as 'output'.