Missi, I see where it gets confusing - we're so used to pressing those things back, like binding. The folded border never gets pushed back or pressed out - it stays just like it's sewn. We see the stitching and think it needs to be pressed over to hide the seam. The 1/8" seam on the folded border is covered by the 1/4" seam of the next border sewn on.
If you have either of these books by Eleanor Burns (or can get to the library to get a look at them) they have the directions:
Egg Money Quilts - page 98
Still Stripping After 25 Years - page 41