Right. Blink treats the legend as a regular block when generating layout boxes. This means that the text before and after the legend are wrapped inside separate anonymous blocks [1]. We'll lay out the legend specially (i.e. treat it as a legend) during layout only. There'll still be two separate anonymous blocks for the two pieces of text, suddenly appearing to be adjacent.

To fix this we probably have to extend (and possibly rename) our term "floating or out of flow positioned". We probably need to consider a rendered legend to be of such a type, since such objects don't trigger creation of anonymous blocks around sibling inline content. We're generally not allowed to let the order of layout objects diverge from that of the DOM nodes, so just letting it e.g. be the first layout object child won't work.

[1] https://www.w3.org/TR/CSS22/visuren.html#anonymous-block-level

Test case:
<fieldset>
  X
  <legend>legend</legend>
  Y
</fieldset>

Also see https://github.com/web-platform-tests/wpt/pull/12939