This character is a Other Letter and is mainly used in the Arabic script.
The glyph is not a composition. It has no designated width in East Asian texts. In bidirectional text it is written as Arabic letter from right to left. When changing direction it is not mirrored. The word that U+06D5 forms with similar adjacent characters prevents a line break inside it. The glyph can be confused with one other glyph.
The Wikipedia has the following information about this codepoint:
He is the fifth letter of the Semitic abjads, including Phoenician hē 𐤄, Hebrew hē ה, Aramaic hē 𐡄, Syriac hē ܗ, and Arabic hāʾ ه. Its sound value is the voiceless glottal fricative ([h]).
The proto-Canaanite letter gave rise to the Greek Epsilon Ε ε, Etruscan 𐌄, Latin E, Ë and Ɛ, and Cyrillic Е, Ё, Є, Э, and Ҩ. He, like all Phoenician letters, represented a consonant, but the Latin, Greek and Cyrillic equivalents have all come to represent vowel sounds.