The parent is correct, the given command redirects stdout to stderr, it's not copied (so stdout will be empty).

Again, have you tried it?

    # echo "foo" 1>&2 | sed 's/foo/bar/'
    foo
    bar

Edit: I've done some more testing, and discovered that the above works on zsh, but not in bash

2nd Edit: Ahha! http://www.cs.elte.hu/zsh-manual/zsh_7.html . So this is because zsh w/ the stock config (MULTIOS option enabled) will open as many outputs as you give it. So it can both copy FD 1's contents to FD 2 and to the pipe'd command.