Block Boxes

I'm not sure that I understand this part of the spec too well.

"
8.2.1 Controlling box generation: the 'display' property
.....
A block-level box acts as a containing block for its descendant boxes, which
are either block-level boxes or inline boxes (but not both). Sibling
block-level boxes participate in a block formatting context.
......"

The key words I dont undersand are "(but not both)".The literal
interpretation of this would appear to make code such as

<DIV>
  Div Text
  <SPAN>Span Text</SPAN>
<DIV>
Text in a div in a div
</DIV>
  More div text
</DIV>

Illegal in conforming user-agents.(It works perfectly well in IE4 and Nav)

Was this the intention of the authors of the CSS2 spec?

Frank Boumphrey