The illustration attempts to point out the potential pitfalls of using a smaller encoding color space from Raw from such an image and then doing further editing in Photoshop. I would think it also illustrates the folly of suggesting that Adobe RGB (1998) is a large enough encoding space when working with Raw originals.
This exercise does illustrate the points you mentioned, but still there is no advantage in using a color space wider than necessary to contain the gamut of the final image. However, it does demonstrate that ordinary digital captures may have colors well outside of the gamut of Adobe RGB (which was first made known to me by Bruce Fraser in his Camera Raw book). By this time I would think that most of us agree that 16 bit ProPhotoRGB (among the spaces available in Camera Raw) is the preferred working space for digital camera captures. There is no need to argue about that.
The Colorthink plot below demonstrates the gamut of your flower picture along with the gamuts of Adobe RGB and a modern ink jet printer (the Epson 9900 with Epson Exhibition Fiber paper). The image was rendered without adjustments into ProPhotoRGB to include all of the colors captured by the camera. Many of the yellows are outside of the gamut of Adobe RGB but within the gamut of the printer, and these would be lost if one had rendered into Adobe RGB. Still there are yellows outside of the gamut of the printer, and these colors might be capable of being printed by the next generation of printers.
Still, there are occasions when one might want to render into Adobe RGB. For example, the client might demand Adobe RGB or you know that the images do not have important colors outside of the Adobe RGB gamut or you will not be printing on a wide gamut device. In such cases Adobe RGB is a good choice and allows 8 bits per channel and and 8 bit JPEGs. You might want to keep your options open with ProPhotoRGB, but then if you used Adobe RGB, you could still go back to the raw file if you needed an expanded gamut. If you had used parametric editing in ACR, all that would be necessary is to change the output space. If you had laboriously done a great deal of editing in Photoshop, it would have been foolish to have used a narrow gamut space.
[attachment=17473:FliowerColorThink.png]
