How do this become a Iref current source?
This circuit consists of 3 transistors in series. I will name them from top to bottom: M1, M2 and M3.

These three transistors combined will work like a modified single PMOS transistor. M1 and M2 will both operate in the triode region, as their \$v_{DS}\$ is kept small by the \$v_{GS}\$ of M3. So this is in essence a source-degenerated PMOS current source. The equivalent resistances of M1 and M2 will scale approximately with \$v_{GS}-v_{TH}\$.

If the voltage at the drain of M3 is low enough, then M3 will be in saturation and you will get a high output impedance. Hence it can be biased as a current source.