The valve seats are removed and the combustion chambers are welded.
The deck surface is trued and the squish area contour are done after fixturing the head to the lathe faceplate.
Here you can see that the deck is now below the actual combustion chamber surface. When installed with a stock head gasket the squish area will be equal to the piston deck height, which is 1 milimeter below the cylinder deck surface.
Here is a diagram describing the standard versus the new configuration.
For reference, here is a photo of the original, recessed chamber.