The following markup uses the figure element to display an image, inline with the text of a paragraph -- hence the figure is \'included\' inside the first
The figure element is block level and therefore the behavior is correct. Permitted parent tags are those that allow flow elements - http://dev.w3.org/html5/markup/figure.html (example div, section, article...)
Therefore the figure tag should be placed outside the p tag. You can float it to allow for wrap.