This is a recipe for top-down socks that are knit entirely in the round. There is neither short rows, nor back and forth knitting at the heel shaping. This pattern solves one sock-knitting problem with self-striping yarn: the stripe pattern does not get disrupted at the heel, and all colors remain equally represented at the top of the sock.
The pattern can be knit with any yarn, any gauge, on any number of stitches (although it is easier to start on sts. number divisible by 6).