The idiomatic phrase you are wondering about is
failing a condition to be present
without that condition being met
in case that doesn't happen
We will catch the last train to get home, failing that we will have to spend the night here.
I hope to get into the school of my choice, failing that I have a safety school as a backup.
Your passage is saying if either the "--target-directory" or "-t" option is not used, but the last name on the argument list is a directory and the "--no-target-directory" option is not given (to override the use of a directory name), the Unix command ln will create multiple symbolic links.