Hola Екатерина, la estructura es "por mucho/muy que...", quiere decir "sin importar que...". Por ejemplo: "Por mucho que sepas no puedes saber todo" (no matter how much you know, you cannot know everything). "Por muy bien que cantes, no quiero que cantes dentro de la iglesia" (no matter how well you sing, I do not want you to sing in church). Тогда фразу "por muy lejos que viva siempre llega a tiempo" значит "no matter how far he lives he is always on time".

It is because of the use of "subjuntivo". It means it doesnt matter how far away he/she lives, he/she is always on time Hope it makes sense :)

-It doesn't matter how far he lives, he always arrives on time -No matter how far he lives, he always arrives on time