Yes, but it was created by joining transactions that were below 1 sat/vB fee rate, see sighashes.
The protocol doesn't care what happened before the final transaction was made and individual inputs don't pay a separate fee to come to a final sum. Meaning the protocol doesn't care if the owner of input one with a value of 0.00001 BTC took out 0.00000895 BTC or 0.0000179 BTC (2x the input), the protocol sees the whole transaction and the fee that this transaction paid in total.
People don't want to go below 1000 sats/kvB on-chain,
Actually there has been some proposals about decreasing the minrelaytxfee to less than the current value.
