I think you are correct. The passage you cite seems to refer to figure 2, showing the light levels for an 8-bit jpeg image, and in that table the first two steps have a total of 20+27=47 levels. Note that the total for all five steps in that table comes to 203 levels, so 53 levels presumably are squeezed to the edges at top and bottom and don't really hold detail.
Does this help?