find command selects all directories and subdirectories (recursively) in the ~/test directory
grep command weeds out . which represents current directory (this may not be necessary in your case)
"execute" for a directory means allowing somebody to navigate through it, hence cd failing, or paths that include that directory will fail.
The reason I didn't suggest removing the execute bit is for precisely that reason. You may want all your directories set to 444, I don't find that particularly useful.