This could mean an element that is further behind the flank could not do a flank attack while an element more towards the front can do a flank attack.
You understand it correctly, but It is a choice… after all it is a houserule.
My original proposed houserule makes it possible to line-up in flank edge contact, when moving only straight ahead this turn, until reaching the enemy-TZ, allowing a full flank edge contact instead of a corner-to-corner contact.
If this line-up would reach the front border of the TZ it would be, at 80p, subject to the TZ, so not allowed. However this doesn’t apply to the left or right border of the TZ.
Players can argue that this houserule should only apply when, as in my latest example, the flank isn’t at an angle (other than 90°) from and completely in front of the moving element. In that case your example wouldn’t be allowed. My adjusted houserule should prevents other circumstances.
This isn't very satisfactory, so you could consider adopting a "house rule" or "playing convention" that allows the flank contact.
By the way, my preference is for my original houserule, in which case your example would be allowed, but I really like to know if you would give one of my houserules a try, and in that case, which houserule you prefer.