It means you can field exactly one character die currently in your used pile, placing it on its level 3 side. Dice in the used pile are not considered to have a side. Someone more knowledgeable than me will probably be here shortly with references to the rule book and Wizkids Rules Forum.
Also, sidekicks are only considered character dice when fielded, and they don't have a level 3, so you could not use this to field a sidekick from your used pile.
This is 100% correct