Timelinex. From my personal experience with side focus knob scopes (multiple leupold Mark 4s) on multiple rifles you are correct. Just because the target is in focus doen't mean the scope is parallax free. Since I learned that you adjust the side focus knob until the crosshairs don't move on the target, not when the target is perfectly in focus, my groups have gotten much better in local bench rest matches.
BTW your explaination is the best I have come across.