Is this a correct interpretation?
That interpretation wouldn't make much sense since it implies that races lose their existing racial features first, before selecting additional "slot" features... and if that were the case, there'd be no reason not to give all races the same number of "slot" selections since they'd be balanced around slots, not racial abilities (which would have been removed in your interpretation).
Since different races have different slots, corresponding to their theoretical ECL, it seems more likely he means the features are in addition to their normal racial features and stat adjustments.
In that case, it basically means all races are in the ballpark of ECL 3, at level 1, which is going to guarantee that normal low-level content will be no serious challenge to them. Such a system would exist solely for a campaign designed around high RP monstrous races, and is intended as a means of bringing up lower RP races to keep them in line, power wise, with the high RP races being used.