The inside should look like this. The dark thread is the original seam, the pink thread is the underside of the understitching. All the seam allowance is pushed to one side and sewn down.
Understitching can also be used when there is something between the fashion fabric and lining like ruffles or piping. This is the neckline of my photoshoot dress. The understitching keeps the piping lie flat and the lining inside.