Yep, pretty much correct.
The silver braided wire is your pickup ground wire and the black woven cloth wire is your pickup hot wire. Both wires are conductive but the black woven insulation on the hot wire keeps it insulated from ground or other hot wire sources. And therein lies a concern in your control cavity.
The hot wire should only contact the center lug of each respective pot. But in your case the black woven cloth hot wire on the center pot has been pushed back and the exposed wire is dangerously close to grounding out on the grounded lug next to the center lug. Ideally you should push that cloth back down to approximately the solder joint of the center lug and then gently bend the hot wire such that it will not come in contact with any other wires or pots if the insulation should slide out of place again.
