I think this is saying how frequent flyers will be treated on the airline they are flying. The airline is on the left. The frequent flyer is across the top.
So it’s saying if you are flying BA, no Oneworld elite will get any baggage. If you are flying AA you will get 3/2/1 bags depending on your Oneworld status.
I agree that your conclusion seems much more logical, and would also cater for Emeralds, Sapphires and Rubies from other oneworld airlines - but that table (especially with the heading Frequent Flyer Membership where it is) is confusing.