Yes, this is correct. Device to device traffic on a LAN is simply passed between switch ports.
There are some consumer brand routers, Netgear comes to mind, that have been known to interfere with LAN side traffic under certain conditions if you are using the the routers (LAN) switch ports for...
But if you need to make the best of what you have to work with, I strongly recommend using a VPN service, like PIA (private internet access) for example. I run it full time on all my mobile devices.
FYI - Another option
As I was never happy with the results using QoS to control my guest network, I went with firewall rules below to regulate maximum guest (vlan) speeds.
Note: running dd-wrt
My guest is on a vlan at 192.168.2.x
In the rules below, the guest subnet is limited to 10Mb down...
+2 - The only thing I plug into a router's LAN port(s) is a single cable going to a network switch. All devices plug into the switch(s).
Many router LAN ports have poor traffic handling capabilities and/or the router mistakenly interferes with what should be unmolested device to device LAN...
There shouldn't be a double NAT condition if the Asus is really in AP mode.
If the cable from the modem is plugged into the WAN port on the Asus, try moving it to a LAN port.