Hi Bill, thanks for joining the forum!
The strings will go over the zero fret and through the small hole, come out the back side and then wrap around the peg on the back of the peghead.
No need for notches in the nut because the small holes are spaced to place each string where it needs to be- therefore we use a simple fret here.
I used to route the strings like this to get a good downward tension on the string at the fret zero nut, and then there was no need to make an angled or scooped peghead. It was all to make things as simple as possible. I’ll look for a time stamp in a video where I show this.
Hope that helps!