> The flexbox container inside pill2 "hides" the inner text, so pill2 is treated as having no text at all (for layout purposes). This is treated the same as a font having zero height. So the browser aligns a 16px font (or whatever) with a 0px font, and it comes out misaligned.

That’s actually not what happened.

Images have their baseline at the bottom edge, so Pill 1 is simply aligning its text to the bottom of the <img> element which is the first item in Pill 2.

You can confirm this behavior by enlarging the image, you can see Pill 1 shifting vertically to align the text baseline to the new bottom edge of the image.

You can also swap the order of the <img> and <span>Pill 2</span> so that the text goes first. You will see that they will now align despite the fact that the inner text is supposed to be “hidden”.

An easy way to solve this is to give .wrapper a hidden pseudo element with a bit of text so it becomes the first item to be used for alignment.

.wrapper:before { content:"a"; width:0; visibility:hidden; }

You can also just set the image as background to avoid the <img> element altogether.