Indeed Oz, that's approximately what it does. But for enhancing skin tones it is a quick method to obtain acceptable results. Fot other colours is isn't practical.
Mind if I write down the steps too? (your knowledge of PS is obviously quite good)
- go to the channels palette
- click on the green channel's text. The channel will be selected. Click on the eye icon of the green channel your image will turn grey, the greyscale values of what is green in your image
- Ctrl+A to select what you see
- Ctrl+C to copy it to the clipboard
- see that your image is back in colour by clicking the topmost RGB channel.
- Ctrl+D to deselect
- go to the layers palette and click on the icon at the bottom to make a new layer and see that is is selected
- Ctrl+V to paste the greyscale image from the clipboard to this new layer
- set the blending mode of this layer to Luminosity.
When I paint in the old Flemish technique, I use a green hue for my first tempera layer when I need skin tones. Green is also the best channel for skin tones. When we choose luminosity, we keep the lightness of our selected layer and we mix that with the hue and saturation of the layer below it. See? We keep the colour of our original image and we give it the brightness of the green channel, the best grey-scale counterpart of the ideal skin-tone.
The left image is the original one. Although I tried to correct the exposure for the contrast of the face with the light background, the face is still a bit too dark. The image on the right-hand side is corrected. Normally I would also select the skin-tone parts first, but this is only a quick illustration of the effect. Bear with me...
Look at the colours of her sweater to see the harm this trick does to the other colours and hues...