Yup, you are correct. One player is chosen as the Host, all "referring" goes through this host to the server and back again. Host to server to host to client/s. Client to host to server to host to client/s. This is the "Host advantage" that people refer to, you can see that a client has an extra hop for action verification. It is my understanding that Bungie has been using this schema since Halo 2. The Netcode has been improved since then obviously but the basics persist.