That's exactly right. Environments swizzles bindings around so that you can refer to classes by whatever names you want, but it doesn't change your source code to actually use those names.
If you've got a pre-existing MyApp that refers to Magma classes via prefixed names, when you load it into appEnv, it won't have any changes, but all those references will be broken. You'll need to rewrite the source code to use the new names. (Should be fairly easy with the RB).
If you're starting your app from scratch, it's less of an issue. :-)
Wow, that is surprising. I always thought of Environments as the tool to _save_ me from having to use the Rewrite tool. I also didn't realize that the source codebase needs to be kept in-sync with the Environment declarations. Wouldn't it be better to let code remain unaware of Environments?