That’s correct. The bypass filter arrangement uses the brass screen to filter the bulk flow to the bearings and the paper cartridge to filter the bypass flow. In its time it was an improvement over previous types. The paper filter technology could not pass the full flow without being huge but could filter part of it through a reasonable sized filter. It was a step in the right direction.
Bypass filters are sometimes used today for the additional reduction in very small particles that are typically not removed by full flow filters.