It shows that the topographic and structure contours intersect to form boxes, often very irregular ones, and that the outcrop band enters at the lower corner and exits at the higher one. Any time you see a purple band bounded on one side by green and on the other by yellow, the outcrop must pass between the contours . The reason is that the topography spans an entire contour interval and therefore must intersect the bed somewhere in that interval. This is fairly obvious when the two pairs of contours enclose a fairly neat box, but it applies equally well in all situations. It tells you, for example, that the outcrop must pass around an isolated hilltop, for example.
Saddles are inherently ambiguous.
In the northeast corner a small hilltop is shown as surrounded by an outcrop band. The coloring shows us that the topography in that area spans an entire contour interval, therefore it must intersect the bed somewhere. Thus the outcrop must pass around the outside of the hill. What cannot be determined is whether the outcrop is connected to the main outcrop band, disconnected as shown, or perhaps just barely connected. There's no right or wrong answer in many cases, we just have to examine the data and draw the most likely configuration.