raschemmel:
So why is it connected to the regulator output ?
Because I was unraveling the OPs given circuit -- with the assumption that they asked so I responded. But, I probably should have asked, up front, why the heck they are doing that -- rather than asking later.
larryd:
There is no scolding here.
I was being facetious [i.e. tongue-in-cheek] 
raschemmel:
The point was new people here often have difficulties reproducing simple schematics to actual circuits.Any kind of multiple power supply situations quite often gets NOOBs confused and into problems.
True.
raschemmel:
When they do run into problems, they are often asked to take test measurements and confirm GNDs are connected.
The opposite of this case. The grounds are connected. AND, there's a second common, which, also, is connected.
raschemmel:
As mentioned by you, there are things called "Rule of thumb . . . .", rules of thumb are great.
Well, it is 'my opinion' (yes 'my' opinion) and Rule of thumb, that for interconnected power supplies, use 0V, GND, negative as a return path.
Which is silly ! And not of the real world. It's the common case, but not the general case. But, I see your position of not confusing the NOOB. So, maybe the appropriate language is: "For now, lets only talk about Ground as negative, but some day..."
raschemmel:
Yes you can connect the positive of a battery to the 0 volt pin of another power supply.
Yes you can connect the positive of a battery to the positive of another power source.
Doing so is not wrong but following my rule of thumb keeps new people on a even footing where they hopefully don't experience problems.
I still wouldn't call that a rule of thumb. Its a common practice. But, that's not quite the same thing.
And, again, bottom line. I was merely showing the OP how the circuit they supplied might manage to do something.