Direction and Orientation are two different things in most of the Factorio API, so having the term used seemingly interchangeably here is confusing. For many "normal" entities, the direction specified here ends up as the direction property of the created entity. For entities like vehicles and rolling stock, the direction specified here gets converted to an orientation, then the entity gets that orientation or an orientation snapped to the curved rail it's on but has direction==0.direction :: defines.direction (optional): Desired orientation of the entity after creation.
One or two extra sentences here might make this more clear.