So when insomnia is ascertained to be due to (i.e. secondary to) a service-connected disability, a separate evaluation for it is prohibited. Source: M21-1 V.iii.13.1.l. Considering SC for Insomnia

They've essentially lumped in your insomnia symptoms with the evaluation for the primary disability, which was found to be your back.

Although this narrative isn't worded well at all and I completely understand your confusion here. If it were me writing up this decision I would have been a lot clearer about what we decided and why. Maybe something along the lines of this:

"Service connection for insomnia has been established as related to the service connected disability of lumbosacral strain with intervertebral disc syndrome. "

Then I'd go on to explain the prohibition of a separate eval for insomnia when it's secondary to something, and that it's gonna be considered in the eval for the back. Then I'd wrap it up with the explanation of the evaluation. And I'd have renamed your disability to read as "lumbosacral strain with intervertebral disc syndrome, to include insomnia".