The illustration shows the orientations of the USPS watermark which are possible when viewed from the back of the stamp with the top of the stamp up, the way most collectors look for watermarks in a tray of fluid. All orientations other than "normal" are possible if the paper the stamp was printed on was not placed in the printing press with the watermark facing up and reading normally. The same orientations apply for the single-line USPS watermarks.
The "rotated left" and "rotated right" orientations are only possible when the paper was printed sideways with regard to the watermark. This can be of large importance in ferreting out spurious coils made from booklet stamps. The lower denomination stamps, which include most of the coil stamps, were printed using the horizontal, that is "non-rotated" watermarks illustrated below. Booklet stamps, and some higher denomination stamps, were printed on smaller sheets with the watermarks sideways ( the "rotated" stamps below). Thus a one or two cent coil with a sideways (vertical) watermark has a high likelihood of being a fake made from a booklet stamp.