I believe you're reading correctly, but the help is in two completely
different parts, so it's difficult to be SURE what they mean. Here's
something I found that could be where you're getting it.
The first section is under "About Google Pictures", and a key point is
that it says "configured to show to all users who you email or who
email you, or they can be limited" I think you may be missing the
"limiting" part.
Under "Selecting your Google picture"
<http://mail.google.com/support/bin/answer.py?answer=35529&ctx=sibling>.
It mentions a setting to "select whether you'd like all Gmail users to
see your picture, or only those who you've allowed to chat with you".
I'd check to make sure you'd limiting it to only allowed to chat with
you vs all GMail users, prior to filing a bug report.
If you've forgotten how to submit a bug report, just search this forum
and you'll see it mentioned several times. No Google Employee
officially reads this forum.