In my understanding of MLS, the first paragraph is correct. Each unidirectional sequence of packets with same source and destination and transport layer is always a separate flow. The second paragraph seems to be referring to the destination-ip flow mask, in which different flows with the same destination are switched on the basis of a single MLS cache entry. This does NOT imply that they are all the same flow, only that the destination-ip mask directs all flows to the same cache entry. This is sort of analagous to the way a subnet mask directs all IP packets to the same interface, hence the use of the term "mask".
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