First let me start by saying that I have absolutely no experience with this. The above drawing was sent to me and I filed it away for future reference for when I start making laminated fiberglass bows.
That being said, here is how it was explained to me. The drawing applies to laminated fiberglass bows only. With a selfbow, there is a chance that one side of the limb could be stronger than the other due to thicker material on one side of the limb (as in Tim's experiment) or maybe just different material properties from one side of the limb to the other. The chances of a laminated fiberglass bow being stronger on one side than the other are slim. Fiberglass bows use uniform thickness lams across the width of the limb and material properties are uniform throughout. The limb doesn't twist because one side of the limb is stronger than the other, it twists because the limb is not being loaded properly. The forces bending the limb are not being applied symmetrically because of misalignment or layout problems. The goal is to have the string centered over the centerline of the limb. To do this, you can move the string towards the centerline of the limb (deepen the string groove) or you can move the centerline of the limb towards the string (sanding the side of the limb).
That's how it was explained to me. Is it correct? I can't say for sure. Like I said, I have never tried this but at the time it made sense to me. I'd like to hear from someone who has actually made this adjustment before and how they corrected the problem. Maybe the drawing is incorrect and if so I need to get rid of it.
Bill