[guided]The key point is that the last variable is being specialized to $1$, so the entries labelled $n$ should be treated as invisible weight-wise but still visible shape-wise. We use the tableau definition of Schur polynomials: for a partition $\nu$ with at most $m$ parts, $\operatorname{SSYT}_m(\nu)$ is the set of semistandard tableaux of shape $\nu$ with entries in $\{1,\dots,m\}$, and
\begin{align*}
s_\nu(x_1,\dots,x_m)=\sum_{T\in\operatorname{SSYT}_m(\nu)}x_1^{a_1(T)}\cdots x_m^{a_m(T)}.
\end{align*}
Here $a_i(T)$ denotes the number of entries of $T$ equal to $i$.
Now take $T\in\operatorname{SSYT}_n(\lambda)$ and remove all boxes labelled $n$. Call the remaining shape $\mu(T)$. Why is this shape interlacing with $\lambda$? In each row, weak increase forces every $n$ to appear at the far right of that row, since no entry can be larger than $n$. In each column, strict increase prevents two entries equal to $n$ from appearing in the same column. Thus the removed skew diagram $\lambda/\mu(T)$ has at most one box in each column; this is exactly the horizontal-strip condition. For partitions with row lengths $\lambda_1,\dots,\lambda_n$ and $\mu_1,\dots,\mu_{n-1}$, the horizontal-strip condition is equivalent to
\begin{align*}
\lambda_i\ge \mu_i(T)\ge \lambda_{i+1}\quad\text{for every }1\le i\le n-1.
\end{align*}
The inequalities also show that $\mu(T)$ is a dominant polynomial weight for $\mathfrak{gl}_{n-1}(\mathbb C)$: if $1\le i\le n-2$, then $\mu_i(T)\ge \lambda_{i+1}\ge \mu_{i+1}(T)$, and $\mu_{n-1}(T)\ge \lambda_n\ge 0$. So every tableau of shape $\lambda$ determines an interlacing dominant polynomial weight $\mu\prec\lambda$.
Conversely, fix an interlacing shape $\mu\prec\lambda$ and a tableau $S\in\operatorname{SSYT}_{n-1}(\mu)$. Fill every box of $\lambda/\mu$ with $n$. The inequalities $\lambda_i\ge \mu_i\ge \lambda_{i+1}$ say precisely that $\lambda/\mu$ is a horizontal strip, so no column receives two added boxes. The row condition remains valid because the added boxes sit at the right ends of rows and carry the largest possible entry $n$. For the column condition, consider an added box in row $i$ and column $c$. Since it is added, $c>\mu_i$; since $\mu_i\ge \lambda_{i+1}$, row $i+1$ has no box in column $c$, so there is no existing box below the added $n$. Any existing box above it has entry at most $n-1$, because $S$ uses entries in $\{1,\dots,n-1\}$. Hence the new filling is a semistandard tableau of shape $\lambda$ with entries in $\{1,\dots,n\}$.
The two constructions are inverse: deleting the $n$-boxes recovers $S$, and adding $n$-boxes to $\lambda/\mu$ recovers $T$. Therefore, after specializing $x_n=1$, the [generating function](/page/Generating%20Function) splits as
\begin{align*}
s_\lambda(x_1,\dots,x_{n-1},1)=\sum_{\mu\prec\lambda}s_\mu(x_1,\dots,x_{n-1}).
\end{align*}[/guided]