That is, an actual D# played on the actual B string is written as an E on the staff.
It's weird to learn the Kodaly this way, but the piece is hard enough that, at least in my case, I basically have to memorize it to have a fighting chance. I still haven't performed it for a real concert after 20 years of thinking about doing so.
This also creates some ambiguities, since you can play many notes on either the F# string or the D string. But context is enough to tell what Kodaly meant.
Relatedly, the fifth Bach suite is also written for an alternate tuning ("scordatura"), with the same "wrong note" approach to notation (at least in modern editions). The A string is tuned down to a G, giving you beautifully transformed resonances for the key of C minor.