If the formula isn't in sheet1 then I think you need "sheet1!" before
the $N:$N, i.e.
=SUMPRODUCT(SUBTOTAL(3,OFFSET(Sheet1!N:N,ROW(Sheet 1!N2:INDEX(Sheet1!$N:$N,Sheet2!B1))-ROW(Sheet1!N1),0,1)),--(Sheet1!N2:INDEX(Sheet1!$N:$N,Sheet2!B1)="High"))
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daddylonglegs
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