I know it says lower chest or breast. It actually says on the left, lower chest. I agree that it could refer to the pinback. But, I still maintain that the medal was originally supposed to be worn on a ribbon bar.
Knopfloch in this case, in my opinion refers to a miniature and ribbon, or ribbon alone being worn as a buttonhole device on civilian dress. But, it could possibly mean what you say.
However, in 50 years of collecting, I've never seen a picture of anyone wearing a Baltic Cross ribbon in the buttonhole like an EK, which doesn't mean it didn't happen. But, I somehow doubt it. Few awards were allowed to be worn in the buttonhole on the tunic along with the EK, except some State war merit cross ribbons.
But, it should be noted that they played pretty fast and loose with regulations during this period, expecially in the Baltic, and expecially in the 2nd phase of the operation when they essentially revolted and refused to return after being ordered home by the Weimar government.
It's fine to take what I or anyone says with a grain of salt. But, the bottom line is I wouldn't base a definitive opinion on the back of one award document, even if it is the standard issue document.
Fortunately, there's a lot more reference material available now, than there was when I first started collecting Freikorps material in the 70s. Then, there were only von Solomon's book, a few books in German by former Freikorps leaders like Erhardt and von Oven, Robert GL Waite's Vanguard of Nazism and the 2 self-published catalogues of insignia and awards by Verkuilen Ager.
I would rank Verkuilen as the leading world expert on the Freikorps, it's insignia and awards. His first book about Freikorps awards states that the Baltic cross with ribbon was the official award. Several references books since have used Verkuilen as a source of information. I also had an award document, bought from Verkuilen in 1978, (since sold, unfortunately) that stated in the citation - 'to be worn on the blue-white ribbon'.
Anyway, finding out the correct information is a big part of the joy of collecting. So, we can agree to disagree until there's difinitive proof one way or another.
cheers