It looks to me to be the Eleanor Burns method of sewing the interfacing and batting on to the right side of the fabric and then turning it inside out. I use this method whenever I appliqué birds or animals.
If I were to this that is the way I would do it...but no batting, just nonwoven fusible interfacing......then sew down with mono using a very tiny zigzag.....as you can tell, I am no good at needleturn and this is my way of achieving the look(as close as I can)....without the frustration....( for me anyway)