Right. It's an abradable coating that makes the effective piston to wall clearance about .000 or dang close.
As the engine is run during a relatively short break in period, this coating wears off the piston until the running clearance is established, which is usually tighter than an uncoated piston.
The upshot is this coating allows much tighter piston go wall clearance, making the piston more stable in the bore, and thus, increasing ring seal. The more you can keep the ring belt parallel to the bore surface, the better the ring seal.
