You can do either...If you ice the top first you don't see the cracks underneath..You can pipe the grass right on but it has to be close together so you don't see cake especially if it is white cake.
I guess you could do it either way! I just used this tip for the first time last weekend on my Elmo cake. I didn't frost the cupcaks first.....I think it turned out really well. Lots of work though for a large area!
If you look at my "Over the Hill" cake, I used that tip. I did put a layer of green icing under just in case any showed through. Since I was covering with the grass, I didn't make it that smooth so it was simple. 
I agree that a thin layer of green first will save a lot of potential headache.
I also recommend getting yourself a few extra 233 tips. The holes do tend to clog up with use. It's a lot easier to just change to a clean tip than have to wash one over and over.
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