Let $\;\alpha = \text{Arc}\tan x, \;\beta = \text{Arc}\tan y
\;\Rightarrow\; \alpha,\beta \;\in \;(-\pi/2, \pi/2).$
The assertion is that $\;xy < 1 \;\Leftrightarrow
(\alpha + \beta) \;\in \;(-\pi/2, \pi/2).$
$\Rightarrow$
Given that $\;xy < 1.$
WLOG $\;\alpha, \beta\;$ have the same sign, else it is immediate that $(\alpha + \beta) \;\in \;(-\pi/2, \pi/2).$
$\alpha, \beta > 0\;$ and $\;(xy) < 1 \Rightarrow$
$0 < x, \;0 < y,\;$ and $\;y < (1/x) \;\Rightarrow$
$\tan \beta \;<\; \frac{1}{\tan \alpha} = \cot \alpha
= \tan (\pi/2 \;-\; \alpha) \;\Rightarrow$
$\beta < (\pi/2 \;-\; \alpha) \Rightarrow
(\alpha + \beta) \;\in \;(0, \pi/2).$
$\alpha, \beta < 0\;$ and $\;(xy) < 1 \Rightarrow$
$x < 0, \;y < 0,\;$ and $\;[$since $x < 0]\;$
$\;y > (1/x) \;\Rightarrow$
$\tan \beta \;>\; \frac{1}{\tan \alpha} = \cot \alpha
= \tan (-\pi/2 \;-\; \alpha) \;\Rightarrow$
$\beta > (-\pi/2 \;-\; \alpha) \Rightarrow
(\alpha + \beta) \;\in \;(-\pi/2, 0).$
$\Leftarrow$
Given that $\;(\alpha + \beta) \;\in \;(-\pi/2, \pi/2).$
If $\alpha$ and $\beta$ have different signs
then $x$ and $y$ have different signs $\;\Rightarrow\; xy < 0 < 1.$
WLOG, $\alpha$ and $\beta$ have the same sign.
$0<\alpha, 0<\beta\;$ and $\;(\alpha + \beta) < \pi/2
\;\Rightarrow$
$[\;0 < x, 0 < y\;$ and $\;\beta < (\pi/2 - \alpha)\;]
\;\Rightarrow$
$y = \tan \beta < \tan (\pi/2 - \alpha) = \cot \alpha = (1/x)
\;\Rightarrow xy < 1.$
$\alpha<0, \beta<0\;$ and $\;(\alpha + \beta) > -\pi/2
\;\Rightarrow$
$[\;x < 0, y < 0\;$ and $\;\beta > (-\pi/2 - \alpha)\;]
\;\Rightarrow$
$y = \tan \beta > \tan (-\pi/2 - \alpha) = \cot \alpha = (1/x)
\;\Rightarrow $
[since $x < 0]\; xy < 1.$