[Haskell-beginners] Difficulty understanding how to use filterM to compute powerset

[Olumide]

Dear List,

I'm trying to apply the following definition of filterM (from Brent 
Yorgey's blog 
https://byorgey.wordpress.com/2007/06/26/deducing-code-from-types-filterm/)

import Control.Monad  -- for liftM

filterM' :: (Monad m) => (a -> m Bool) -> [a] -> m [a]
filterM' p [] = return []
filterM' p (x:xs) =
     let rest = filterM' p xs in
       do b <- p x
          if b then liftM (x:) rest
               else            rest

in order to understand how filterM can be used to compute the power set 
of a list, as follows

    filterM' (const [False,True]) [1,2,3]

Where p in the filterM' is (const [False,True]). What confuses me is 
that p x in filterM'. Based on my very limited understanding p x returns 
b = [False, True]. How b be tested in the subsequent if-statement if it 
is indeed a list? What am I getting wrong?

Regards,

- Olumide