Cutting fabric on a fold is a very common sewing practice.
For pdf patterns, it is especially helpful because it gives a lot more room to design things in larger sizes since you only have to provide half of the pattern piece.
Anytime you see the text indicating you should cut fabric on a fold, simply fold your fabric, and place that edge of the pattern piece along the folded edge of the fabric:
Now cut around the top, sides & bottom, but DON'T cut the folded edge. When you open up the piece, you will have the full size piece: