In html you end a text style with a /

So think of how you put an asterisk around words to bold / italicise them on sm. In html it would be bold or italics. The slash is an "end format" indicator

So /s or /sarcasm means "end sarcasm" and indicates by reasoning that the previous statement was sarcasm.

The diamond brackets got dropped because with them they were being interpreted as actual html commands on early forums