The actual interface of that function is:
func max(by areInIncreasingOrder: (Element, Element) throws -> Bool) rethrows -> Element?
The predicate argument defines what "increasing order" is for the purposes of the function. When you use > as the predicate, you're saying that a > b implies that a is before b in the order you want to use. Since 3 > 2 and 2 > 1, 1 is the "maximum" according to the predicate that you provided.
As @suyashsrijan notes, you can use .max() if you want the "natural" ordering.