When a carpenter is hammering a nail into some wood and the head of his hammer misses the nail and hits the surrounding wood, it makes a small depression there in the shape of the hammer head. That is a Chicago Rosette.
1) Careful on that last piece of oak there boys, we don't want the customer seeing any Chicago Rosettes.
2) Who's the dumbshit who left a Chicago Rosette on that moulding?!