Yes, “book of faces” or “book of photos of faces.”
Most questions about the meaning of brand name words don’t have a definite answer. Brand names are invented words, so they could mean anything.
In the case of Facebook, however, there is an answer. A “facebook” was originally something like a “yearbook” for new students — an internally published, printed collection of photos of enrolled college students from a particular school, year, dormitory, or fraternity / sorority, allowing students to share contact information and put names to faces (and vice versa). Some schools called them “lookbooks” or “photo directories.” These directories were originally printed on paper and later began to be put online.
Early versions of the Facebook site (before it was called Facebook) used “photos compiled from the online facebooks of nine houses”: this often-cited quote appears in Tabak, Alan J. (February 9, 2004). “Hundreds Register for New Facebook Website”. The Harvard Crimson. Cambridge, MA. — see also Wikipedia’s Facebook article, History section.