I think I just kind of deduced about that ring the moment I started playing dragoon (pretty sure Dragoon used to have the directionals back in the day), but I'd just chalk that up to playing too many video games...
That being said, I'd say that the target ring having these features only helps you hone in on mobs with more confusing form factors. Otherwise, it's typically pretty clear where the monster is facing, which in turn tells you where the rear and flanks are.

PotD also removes this entirely and makes them closed rings with no arrows, which I guess just stokes the "potd creates bad players!" fires...