[CSS21] shortening inline-height has no apparent effect

Hi,
Expanding the inline height of the inline box in the following example has the expected separation (effect due to expansion of its line box):

http://jsfiddle.net/8XJhY/6/

But *shortening* the inline height of the inline box does not bring the succeeding line box closer (does not appear to shorten its line box), for example:

http://jsfiddle.net/8XJhY/1/

Can someone help me explain this (or point me to the relevant section of the spec)? 

Thanks very much