Paragraph Margin applied to image?

[dmitriz]

I could not reproduce what is described here:

Any margin that we add to the paragraph is being applied way off to the right of the image. This is because the image is actually inside of the paragraph’s box! This is why it doesn’t increase the space between the image and the paragraph.

In my bin here, the behaviour is the expected one, not as described:

http://jsbin.com/lalobo/edit?html,css,output

EDIT.
I have checked the linked reference and think their explanation is wrong - the image is definitely NOT inside the paragraph. It is clearly visible in my jsbin.