We are creating a tree of rank r. The structure of a tree of rank r is a root node with r children of ranks 0..r-1.

What the part you quoted means is this.

When we get a new element x we compare it to the element in T0 We create a new tree T0' of rank 0 containing the greater of the two compared elements We create a new node T containing the lesser of the two compared elements and with T0',T1,T2...T(r-1) as children

Now T is a binomial tree of rank r and it is in heap order.