Ok, I had to unpin the jacket pleats to cut the jacket correctly. I have pinned them back in place and here is what I notice.

If I fold the back of the jacket along the back-side seams, it creates the back flap of the jacket quite well. This would be the flap that is between the two side vents. That edge created by folding along the back-side seam, which will point toward the front of the jacket, is pinned down to the jacket which creates a fold on the inside of the pleat.

The pleat is pinned down somewhere around the waist level of the jacket. This all creates a giant box pleat across the back side of the jacket, and this box pleat is the back flap of the jacket instead of the back flap being created by opening the back-side seams as in the standard jacket conversion.

It also takes up some slack in the front of the jacket and now it hangs a little more like a single button jacket, which is not meant to be closed at the front.

If any of that makes sense, here is what I notice. This back flap needs to be pressed to stay in place, but it also needs to have some stitching to make the folded edge's two sides stay together as if they were a single piece. Think of it as a bird's tail laying down the back of the jacket after the stitching instead of a box pleat. It will also need to be stitched down at a couple of points along the natural waist line instead of the single point where it is pinned right now. The neat thing is that the back-side seam is already flared from the shape of the skirts around the jacket, so the flap has a little bit of a flare to it. I did not cut back the hem on the back two panels of the jacket because all this folding changes the places where the hem will fold, and I needed a bit of wiggle room.

I understand this is very difficult to follow, but I will keep trying to think of better ways to describe it as I work on the jacket.