Surely "pencil the negative" was spoken derisively about retouching in general.
But specifically a little pencil right at the edge would lighten an edge and that would enhance edge effects.
Weston hated retouching and finally got to a point in his portrait business (which he did fairly reluctantly to begin with) when he said he would not retouch anyone's portrait.
I think he was more likely to print straight from the neg as compared to AA.
weston used a graflex slr ( i think 3x4 ? ) which had a small bellows
usually the flash attached to the side ( at least with super d's i see images
with side mounted flashes ..
like the graflites on the speed graphic ... same orientation .. )
but my guess is he held the flash over the lens plane ..
but who knows, i certainly have no idea what he did or how he did it, its just a guess
OK, I have to admit that I didn't know that he used such small cameras, I always had him in my mind intimately attached to this size of camera: