Hard to tell for sure, but I would imagine she gathered the ruffles then either sewed it to the waffle top (elastic thread?) or just tacked here and there to the top. Not sure the tacking here and there would hold up very well. and sewing the ruffle would have to be done in a way that it would allow the ruffles to stretch with the waffle headband.
Good luck, maybe the owner of that dress in a member here, and willing to share!