Let's Talk About Blake Lively's Cannes Day 2 Ensemble

What is this. I mean, I know it's Chanel but WHAT IS IT.

Is there an embroidery hoop stuck around her waist? Is this a garment designed to have wearers shove hands in the "pockets"? Did a mermaid craft this from shimmery barnacles and magical voice-capturing seashells? Are there BOYSHORTS underneath? What am I looking at. Please explain it to me.