Yes, it's mostly folding and not cutting.

I think the idea is that because you don't sew the fabric into a tube, you can reach inside to slot the wire between the folded layers in the channel you've seen, and then take it out again for washing, which would avoid the problem of the wires getting twisted out of shape in the wash. I skipped that in mine, though, because my fabric was already sewn into tubes with a different colour lining.