Close.... but if you look a bit more closely at the diagram, layer C (organic cotton) is touching the coilSo according to the diagram the "ceramic paper" is directly against the coil and prone to burning.
As for the people complaining about an initial burnt taste, or black flakes showing up, that is layer C (organic cotton) burning off. To remedy it, they need to let the new coil sit longer to allow their juice to fully wick through all the layers. Or "prime" the coil with a couple of drops of juice from the inside (and still let it sit a bit longer in a full tank).