Hi Jubalicious,
I had some similar questions about layers and blend modes so did some research (and found this post as well). When Ashley says that it's rendered to its own off-screen surface, he means that memory is reserved to hold another full screen image. The off-screen surface can't be seen, and it's not hiding off the edge of the screen or anything. It's used as a scratchpad and you will never actually see what's drawn to that memory, but instead, after we've drawn to the off-screen surface, then we draw the image from the off-screen surface to the screen.
If you're interested in the technical details, you can check the Javascript file "layout.js" functions "Layer.prototype.draw" and "Layer.prototype.drawGL". Draw creates a new HTML5 Canvas in memory (but it's never added to the webpage), and DrawGL makes a WebGL Texture object.