You can't see it from the pics because the guitar completely covers it up. A zero-clearance insert fits snug into the hole the blade goes through, almost right up against it. As all power saws cut down, the opportunity for tearout from the blade is on the bottom of the piece. Without the insert, there is a large gap under the wood what can allow tearout as the blade passes through the wood. The zero-clearance inserts support the wood so that tearout is virtually, but not completely, eliminated.
Another benefit of the insert for scroll work is support of thin cuts. I've learned through experience that when the wood left fets narrow, it can be broken off when the blade is cutting on the other side of the thin little piece. With what was done on this guitar, look at the line between the dragon's head and it's horn, and between the body and the wing. The vibration and force of the downward cut could break that thin piece out. The insert supports it so the blade won't break it.
FWIW: My "insert" consists of a large piece of fiberboard with an 1/8" hole drilled into it that was clamped to the table.
And now, back to the show....
dragons all cut out
smoothing out the cuts & finesse shaping
I used various bits with the Dremel - fine carving, sanding disks, sanding pads, etc. Because this was done 100% by hand, there are minor variances with the two sides. All things considering, I think I did pretty good.