This diagram illustrates a floating image that overlaps the borders of one paragraph in normal flow: the paragraph borders are clipped by the non-transparent parts of the image. The second paragraph is forced below the float by the 'clear' property.
There are two paragraphs in normal flow, each surrounded by red border. A left-floating image causes the final three lines of the upper paragraph to float along its right side. The paragraph borders shine through the margin area of the image box. The non-transparent part of the image content area clips them, however.
The second paragraph flows normally, starting below the image's bottom margin. The top margin of the second paragraph is stretched up to meet the bottom margin of the preceding paragraph.