Clarification on D-term in PX4 Multicopter Velocity Controller

I have a question regarding the velocity control diagram in the PX4 documentation:
https://docs.px4.io/main/en/flight_stack/controller_diagrams

Under the Multicopter velocity control section, the D-term appears to act on the measured velocity \hat{v}, rather than on the velocity error \Delta v, unlike the P and I terms which are based on the error.

Could you please clarify the reasoning behind this design choice?

Is the D-term here effectively acting as a damping term (i.e., derivative-on-measurement), with the setpoint rate handled separately via feedforward?