Everything you’ve said here also aligns with my knowledge!
I can add some additional information.
The Masquerade option changes how the packet rule behaves when performing in a NAT situation. When Masquerade is off, the rule is configured statically with each interface’s address when the rule is loaded. When Masquerade is on, the rule is evaluated dynamically every time against each interface’s current address.
If you are routing packets through an interface, and the interface’s address is dynamic (which is the case for most residential internet connections), you should have Masquerade ON to be able to route packets after the interface’s address changes during normal operation.