How does this class work exactly?

[drnuncheon]

Actually, melkoriii is wrong. In fact, everyone who has responded seems to have ignored the fact that you are using the half-fiend from the Savage Progressions article series on the WOTC website, and not the FR tiefling or the MM half-fiend. If you look at the first article in the series, the author has this to say:

Characters are not required to complete all the levels of a given template class in uninterrupted succession. For example, a character who takes a level of wereboar could then take a level of fighter and a level of rogue (or any other combination of other class levels) before taking another level of wereboar. A character must still take the first level of wereboar before taking the second, just as with a normal class.

HTH.