If x >= 5, it's in south. If x < 5, it's in north.
If y >= 5, it's in east. if y < 5, it's in west.
That part sounds about right. But I think, even though you select a starting position, you're not always placed in that direction. Because lets say we get 500 new people to join any world, and we all select south-west. The map would become really weird and I think TW prevents that from happening by placing you elsewhere regardless of your choice.
So no, the world is not inverted, but its probably just TW trying to keep a normal sphere shaped world.