Yes, that is correct about the intake. It's wide open, no throttle plate or choke. The engine speed is controlled by either the pump output by means of a swash plate (Bosch/Roosa-Master/Stanadyne), or in this case, by a control rack that is part of the injector unit itself (also common on older Cummins engines). Usually, the governor will control the max rpm, but if they fail, well....
There should be an emergency shutoff valve in the inlet for the blower that chokes off the the air, but it might not have been working on this truck. Tossing the rag in basically did the same thing.
