Your formatting obscures the problem because compiling this example
works fine. I think you are starting a new paragraph before {\bf ...}.
That is a well-known problem and there are posts about it on the mailing
list every once in a while. The sidefigure mechanism uses \parshape to
make the paragraph flow around the figure.
Very many thanks Henri for your patient explanation, and my apologies for inadvertently asking a FAQ. I had thought the effect hasn't happened with the same content in mkii but it must have been a happenstance of different formatting.
Thanks again for the clear solution.
Duncan