The 2 7/8" squares result in HST's that are 2" finished, and the finished block is 6" finished. If you want a 12" block, you need each HST to be 4" finished, so you need to cut the squares at 4 7/8". (Actually you may want to cut them at 5" and trim down.) You are indeed doubling each finished HST size, but you are first subtracting the 7/8" and then adding it back in after doubling.