Concerning %1 :
%1 represent the file used as param of the msedge command. So basically it's your "MSEdgHTM" file.
If you remove it, open a MSEdgeHTM file will just open msedge.exe without opening the file inside it.
Concerning --single-argument :
Msedge is chromium based, you can find information about this argument directly in chromium source code :
The single-argument switch prevents unexpected parsing of arguments
from other software that cannot be trusted to escape double quotes
when substituting into a placeholder (e.g., "%1" placeholders
populated by the Windows shell).
So it's purpose is to be sure that the next argument (%1) will be interpreted correctly as a single argument.
It's probably better to keep it.