It's strictly applied to the "hit or not" as contrarian points out, and applied in the decision tree where that slide indicates. More specifically though, from later in the Paul Bessire slide show...
H/AB = ((1.066*AVG * .934*OAV) / LgAVG) /
((1.066*AVG * .934*OAV) / LgAVG + (1.066- 1.066*AVG )*(.934- .934*OAV)/(1-LgAvg))
Where, LgAVG = (.934*PLgAVG + 1.066*BLgAVG)/2
2000 Pedro vs. 1923 Ruth Example (with handedness):
H/AB = ((1.066*.393 * .167 * .934) / .2795) /
((.393 * .167) / .2795+ (1- .393)*(1- .167)/(1-.2795))
Where, LgAVG = (1.066*.283 + 0.934*.276)/2 or .2795
Result * Handedness = .2502 * 1.045
Final Result = .2614