Ack! I think your new diagram is not adequate, and has several
mistakes and confusing elements.
You have 'encapsulator' and 'encoder' on both sides, even though the
right side is removing the encapsulation and decoding. And the two
processes are not parallel, as your diagram would imply.
HTML markup is a sequence of _characters_ that is then subsequently
represented as a sequence of _octets_; to define HTML markup as "a
sequence of octets" is at least misleading.
I'm disgruntled also with the wording over "line break characters", I
think it may also be a wording issue, though: I think it is untenable
to recommend that HTML in mail violate mail protocol standards, merely
to preserve data integrity checks that might come through another