This comes from the days when people shot off the string and maybe only used one nocking point above the arrow nock. Placing the nocking point approximately 3/16" to 1/4" above square essentially made the arrow perpendicular to the string (level if you want to use that term).

Although level is the preferred starting point for tuning many bows do tune better with the nocking point just a little high, or with the arrow pointed down if you want to say it that way.