defensive players in foul territory

My interpretation of the rule is the same as yours. The other coach wants his player in this position to make it harder for the other player to come to the bag, (I've seen collisions with the baserunners helmet hitting the knee of the 3rd Baseman. Correct positioning would I believe be for the 3rd baseman to play the bag like 1st. Base, in front towards the pitcher if you are trying to hold the runner. The 3rd Baseman has more movement to the left or right on a wild throw. Stradling the bag would make it difficult for the player to get a wild throw and then you wouldn't have to hold the runner because he would be safe at home.