I would take everything you find on that "original source" with huge grain of salt. It is full of misleading terminology (like calling boost converter a "transformer"), misconceptions (what the heck is "buck beak transformer" in power banks?) and really bad drawings.
For example "When the charger is plugged in, this is pretty much a pass through from the output of the transformer" is total BS. The whole point of having charging IC there is to have CC/CV control of the battery charge.
The Adafruit charger referenced from there is also an example of bad design, which is not what I used to see from Adafruit. The MCP73833 used in charger is not a BMS. It is not designed for permanent load attachment, the way that board does. And, it is most certainly not a "5.2v to 3.7v buck converter" as you state in your question (unless you replaced the recommended Adafruit charger with some other device of your choice, which is really bad idea).
Having said all of the above, the funny thing is that by the sheer dumb luck the addition of that D1 diode actually makes the whole mess a good workable solution.
To answer your question about "reverse biased diode" (not "reversed"), it is not a special kind of diode. It is normal diode with voltage applied in reverse, i.e. cathode connected to higher voltage than anode. In this case it becomes reverse-biased and does not conduct electricity anymore.
Both diodes in your circuit work this way. D1 is reverse biased when voltage from wall adapter is greater than charging voltage. D2 is reverse biased when wall adapter is unplugged from the wall but still connected to circuit (although I don't think it really happens this way, with modern switching adapters).
So, the combination of:
- charger output is only activated when external power is connected, and
- at that moment the external voltage is higher than charger or battery, and
- the addition of D1, which becomes revers-biased so that load does not affect charging profile, and
- the use of badly designed Adafruit charger which has load output permanently connected to battery
unexpectedly results in simple UPS circuit.