That image is depicting how each letter’s ascender/descender was determined from the logo.

Look at the big individual M. Notice how one of the black lines up with the dotted line from the logo?

And for all those other weirdly lined up letters, follow the guideline and you can see that it’s setting the angle of the ascenders/descenders/etc of each letter.

They used the logo as a tool to help create a custom typeface.