The gasket goes around the perimeter of the window opening. The fold of the gasket is installed over the edge of the aluminum siding, and the glass is pressed against the flat ribbed side from the inside.
Age has caused the original gaskets to harden and shrink away from the perimeter, which was one of the main causes of the leakage that almost always occurred. The other was from the fact the framing which held the glass in place was thin and fragile and was not very good at holding the glass securely against the gasket after years of vibrations from the road, and moisture rotting the framework away. In many cases the owners (previous ones) would try sealing from the outside with silicone or worse. That seldom worked at all, but in some cases it "replaced" the gasket.