The bold clause references the IDF values from Output.
CREATE fact TABLE tfidf_output2 DISTRIBUTE BY hash(term) AS
SELECT * FROM tf_idf (
ON TF (
ON tfidf_input2 PARTITION BY docid
Formula ('normal')
) AS tf PARTITION BY term
ON (SELECT DISTINCT(term) AS term, idf FROM tfidf_output1
) AS idf PARTITION BY term
);