Inline-block element use cases

The article talks about how 1) “block-direction margin on inline elements is ignored entirely” and 2) “the padding on inline elements doesn’t affect the height of the line text”.

What do they mean by block-direction? Elements that have display: block; are ordered from top to bottom, so does this just mean the margin-top and margin-bottom of inline elements are ignored?

For the second statement, does the padding of the inline element get calculated when determining the height of the element, but ignored by the parent

OR

does the padding just get ignored when calculating the height of the child, thus the parent height isn’t affected.