Try it on a scrap of fabric and you'll get a visual of why it is true. You take 1/4" off the left, and 1/4" off the right, which adds up to 1/2" horizontally. Then you take 1/4" off the top and 1/4" off the bottom for a total of 1/2" vertically. So, your 4" square ends up being 3 1/2" at the end.