I don't read it to say that he can come in from the outside then square up just before the block to make it a legal N/S block. 
Here is a play that appears in this preseason's NCAA powerpoint presentation on rules changes
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EXAMPLE: Back A22 Is Outside The Tackle Box To The Left Of The Formation. His Adjacent Sideline Is To His Left. On A Sweep To The Right Side, 11 Yards Downfield, He Blocks Below The Waist. The Direction Of The Block Is (a) Along The N-S Line; (b) Slightly Toward The Sideline To His Right; (c) Slightly Toward The Sideline To His Left.
RULING: (a) Legal. (b) Illegal Block Below The Waist. (c) Legal.
Note, by his position at the snap, A22 is restricted in his ability to BBW. He can only legally BBW towards the left side line or parallel with the sidelines (north-south). In scenario (a), A22 moves all the way across the formation, squares up and BBW along a N-S line. The Ruling is LEGAL.