EDIT: Ok, figured out for myself. It is the `` (backticks) that cause it to be executed by the shell. My apologies for my the ignorance. 
Pardon my ignorance about PHP, but I am trying to understand your PHP script ...
How exactly is the $output executed by the shell?
From what I have read in the PHP manual, should it not have a "shell_exec()" somewhere in the code?
I don't get how just assigning the variable some content equates to it being executed by the shell. Is there some PHP shorthand code in there somewhere, that I am not aware and totally ignorant about?
EDIT2: Could it be that shell_exec() is disabled on my system and that is what is causing the issue, even though I don't see it in my "disabled_functions"?
I remember reading that for one user, they resorted to using popen() instead ... shell_exec is in the disabled_functions on my cPanel