In bash/ksh, it matches frou_dh's explanation. In zsh, it depends on how you've set the various *NULLCMD options and parameters. In csh, it is an error.
Even in zsh, when configured to behave like `cat file` it still doesn't quite do that as it won't concatenate files as it only passes the first shell word following the `<` to `cat`(or whatever you've set NULLCMD to). Guess that means you could be evil by making a wrapper that allows weird Unicode separators to pass multiple files in one word to get the concatenation back ;)