Rails showing images even though nginx misconfigured? - ruby-on-rails

Question

I have a Rails 5 app. I'm using the Carrierwave gem to allow image uploads to public/system/....
In reviewing production app for performance tweaks, I realized that I misconfigured nginx, and that it's only serving static files from /assets instead of /assets and /system.
What I have:
location ~ ^/assets/ {
gzip_static on;
expires max;
add_header Cache-Control public;
}
What I (think I) should have:
location ~ ^/(assets|system)/ {
gzip_static on;
expires max;
add_header Cache-Control public;
}
However, config.public_file_server.enabled = false is set in production.rb.
So now i'm confused-- how is Rails serving these images? I'm assuming I have a (grossly) incomplete understanding of how the asset pipeline actually works?
Update: nginx config
upstream puma {
server unix:///home/deploy/apps/myapp/shared/sockets/mydomain.sock;
}
server {
listen 80 default;
server_name mydomain.com;
root /home/deploy/apps/myapp/current/public;
access_log /home/deploy/apps/myapp/shared/log/nginx.access.log;
error_log /home/deploy/apps/myapp/shared/log/nginx.error.log info;
location ~ ^/(assets|system)/ {
gzip_static on;
expires max;
add_header Cache-Control public;
}
location ~ ^/(robots.txt|sitemap.xml.gz)/ {
root /home/deploy/apps/myapp/current/public;
}
try_files $uri/index.html $uri #puma;
location #puma {
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
proxy_set_header X-Forwarded-Proto https;
proxy_set_header Host $http_host;
proxy_redirect off;
proxy_pass http://puma;
}
location /cable {
proxy_pass http://puma;
proxy_http_version 1.1;
proxy_set_header Upgrade $http_upgrade;
proxy_set_header Connection "upgrade";
}
error_page 500 502 503 504 /500.html;
client_max_body_size 50M;
keepalive_timeout 10;
listen 443 ssl; # managed by Certbot
# ssl certificate info...
}

Answer 1

It would help posting the whole nginx configuration for this application. Rails will respect public_file_server when served by passenger, puma etc. However, it can be easily overriden with nginx.
The common nginx config line
root /home/rails/testapp/public;
basically tells nginx to serve /public "as it is" and makes public_file_server irrelevant.
(perhaps).