The invocation option 'Inline with the paragraph' behaves similar to 'In a drop down'. The difference is that, instead of multiple paragraphs, you are condensing the contents of the embedded chunk in one or more lines in a paragraph that holds the hotspot.
Invocation option 'Inline with the paragraph'
When the topic is shown in the browser, the embedded chunk is by default hidden in the paragraph.
When you click the hotspot the embedded chunk is shown as one or more lines in the paragraph. When you click the hotspot again the content becomes hidden once more.
Embedded chunk shown inline with the paragraph
In this example the embedded chunk 'Distribution' holds two paragraphs
Embedded chunk with two paragraphs
However, these are condensed to one single portion inline with the paragraph and behind the hotspot.
Embedded chunk condensing the paragraphs
So, if you use embedded chunks inline with the paragraph remember it doesn't make much sense to enter multiple paragraphs in the embedded chunk, it is better to just use portions of text instead.