Yes Dave you are correct. I make most of my sheaths so the knife fits deep into the sheath and the lanyard makes it easier to get the knife out. With the knife deep into the sheath, there is less of a chance of the knife falling out while you are wearing it. My dad lost one of his knives a few years ago when it fell out of the sheath...I told myself I would never let that happen.
Some people like them, some don't. It's just a personal preference thing I giess.