Maximum Redneckus,
The line comes from the bottom of the spool then over the levelwind, then out to the first guide. While it is true that there needs to be some tension on the line for the levelwind to work, it is not much. Just pulling any bait through the water is enough.
The line could have come off the top of the spool and under the levelwind and it would be functionally the same as far as line lay. But, there are other additional advantages to having the spool rotate backwards.
You are right that levelwinds similar to this were used a long time ago, there was always the problem of line piling up on the sides of the spool. Only until a new design was developed over the last 8 years by the original inventor of the Childre Speed Spool reel did the line lay correctly due to a special design.