I agree that these type of instructions are very confusing. This pattern sounds like it must have BOTH a line drawing of template pieces AND a list of rotary cutting instructions. If you copy and cut out the template pieces, and use them to mark on the back of your fabric before you cut,then you must add the 1/4" seam allowance to each piece -- the line drawing is showing you the finished sizes of each part of the block.
On the other hand, if you follow the list of rotary cutting instructions, just follow them and don't add any seam allowance.
Does that help?