That is correct. Now remember that sensor was an input fuel trim to an ECM. This was an early step in better fuel management that was only used for a year or two. Then we had TBI for a bit longer.
What was happening was the overlap allowed raw fuel to escape out the exhaust valve. Whatever happened to the chemistry of the exhaust the fuel displaced O2 at the sensor. This article is from the latter '80's so understanding of electronic controls was not as well understood as today.
