It would be more correct to say that <div> elements participate in a block formatting context, while <span> elements participate in an inline formatting context. The context is how each element itself is laid out with respect to its neighbors. But the element's content is laid out in a different context, which means it might not use the same layout mode! For instance, <span> elements may contain elements which will be laid out in a block context, despite themselves being laid out in an inline context (this is generally not a good idea, but it does work).

You can see this in the following example, where a paragraph (a block element) is nested inside of a span (an inline element) which also contains some raw text. The span containing the paragraph is shown in orange for clarity:

<span>Here's an adjacent span.</span>
<span style="color: orange;">My first line, directly inside the span.
<p>Here is a paragraph nested inside of the span.</p>
Here is another line directly inside the span.</span>
<span>Here's an adjacent span.</span>

This is unlikely to be something you need to worry about when writing in wikitext, though, unless you are trying to create complex custom stylesheets to format your tiddlers.