What this tries to do is take those ratings and bucket teams as a "1", "2", "3", or "4" caliber team for first-round matchups. 1's are teams are the strongest teams and are in position to host first-weekend pods. 4's will likely play host teams. 2's and 3's will face off and line up to play hosts (if they win) in the 2nd round.
Division 3 doesn't do 1-16 seeding like Division 1 does (due to geographical and budgetary restrictions), so it's usually better to think of teams as 1-4 in each first-weekend pod.
As mentioned, this is way oversimplified so don't take the tournament field projection nature of this too seriously.