yes you are correct, the hemmed back is the pocket for your hand or a tile. Also the serged back piece is below the top seam but can't be seen.
Saw this on Sewing with Nancy show. Now we all make these because it only takes 10 min. We use up embroidery samples,scraps, blocks that we've made but not liked.
Will confess I keep one on hand and turn it outside so I can remember how. Once I see it - I remember.LOL