I do not have one of those sensors, but it sounds & looks correct according to Connecting Hydro-Rain HRC-100 Wireless Rain Sensor to Gen3 - Accessories & Sensors / Rain Sensors - Rachio Community.
That is the common way to use a rain sensor with most controllers . . . when it rains, cut off the common wires to all zones. This makes it work for most controllers even though most controllers especially “dumb” controller were not designed for sensors. I like the way Rachio does it, it seems like they thought about it during their design. Remember to set up the rain sensor on S1 within the app.