I see that someone had the same issue I'm having but when I looked through the replies it didn't answer the question. When the instructor is using the stencil only the black lines of the texture brush are being applied to the object and when you look at the texture image itself it shows the checkered look except where the lines for the wood are applied.
When ever I try to paint the texture it brings the color I'm painting with it, instead of just including the wood details it fills the white of the texture with the color. Which isn't what is happening in the video, how do you get it so only the black part of the texture gets applied when painting?
Nodes: 
Object and Brush Setting: 
The first is the instructors wood detail texture. The second is mine, where the color is coming through.
You probably have the color set to black in the brush. Remember that the stencil is letting the color you have set through the stencil, like a real life stencil would. So if you have black tint, it'll paint the binoculars black. So it's working how it's supposed to. Try changing the color to red and see how it'll then paint red in the parts it lets the color through. Did you read this thread? The person had the same issue and it was resolved:
https://cgcookie.mavenseed.com/community/19544-wood-brush-issue
I understand the stencil is working how it should but it's not how it works in the video. My question was how do I get it so that when I paint on the stencil only the lines appear and nothing else? I found the answer, the part missing from the video was the instructor showing how she actually created the texture themselves, that's why there's confusion (Maybe the description of the video should add that). To anyone who is in the same situation the answer is in the texture settings under alpha, you have to check calculate then also invert them.