That's right. It's just about how many patrons you can have on the premises at the one time.
It does not mean that you have to be 4 metres (and later on 2 metres) distance from the service provider.
If that was the case then it would be impossible to operate any service business (hairdresser, barber, massage, beauty, cafe, bar, restaurant, shoe store etc), unless you hired giant squid or octopi.
So the only place it would be an issue for brothels is waiting rooms. For example if your waiting room was 16 square metres you could only have 4 patrons in there at the same time.