This confused me. Aren't you adding or specifying (rather than referencing) an A/B test? In the header, you say "Sequential File", but then you say "sequential directory". I'm not proficient in the advanced editor, but maybe change to something like:
To add an A/B test to your course, you create both the unit that will contain the test and the test. In the Advanced editor, open the ``sequential`` directory and add a <vertical> element, and then add a <split_test> element to that <vertical>. For example: