@More_Piffle With the mkdir /mnt/funtoo, you are making a dir on the live disk so you can mount the directories that are on your root partition "/dev/sdb3." Then when you "mount /dev/sdb3 /mnt/funtoo" you will then have access to the files that you need to edit in "/etc/conf.d/xdm". Thus you are not making another dir on your installation /dev/sdb3. https://wiki.gentoo.org/wiki/Chroot
This video should be helpful as well https://www.youtube.com/watch?v=VrJvqdD4Kkg