Of course this depends on make and model and plant, but on original cars I've seen, and the couple of unrestored survivors that I still have here, it appears to me the black out was done on the firewall after the color was applied, just as you are thinking.
What gets tricky is what you guys are trying to accomplish at the top of the firewall, you guys did a nice job of it
Another way I've done it, is to shoot the body color all around the cowl and down the firewall to some degree, and shoot the rear wheel wells in body color, then do the black out on the firewall and floors, then all I have to do is mask the firewall, shoot the body, get my overspray pattern on the floors while in the process and do the sound deadener in the rear wheel wells last.
On my Z the firewall will be a piece of cake. Mine is a black stripe car and still original, you can see how the factory took gloss paint and sprayed the top of the cowl right over the low gloss firewall coat, so it's all black with no body color showing anywhere in that area. It's much easier to take the gloss black and blow that in on top of the cowl as the "fade" area isn't as pronounced as say....trying to blow white in there or some other light body color.
What I have noticed on mine after a good power wash, a lot of the sound deadener around the rear wheel wells and rear frame rails blew right off and factory Frost Green is everywhere back there. More body color than I have normally seen around that area, even up on the floors towards the gas tank, basically seeing it from behind the doors on back. The black out floor on mine seems to start over the top of the rearend housing and then goes forward from there. Kind of interesting. Wish I could find other 12D unrestored Norwood cars to compare with.