No, it’s the distance between the pole piece and the string, this is the correct way to set pickup height. The recommendations are not based on the “height” of the pickup off the body.
Measuring height from the body (even eyeballing as you’re doing by looking at these pictures) is the wrong way to set pickup height due to the variation in setups. String height can be set to preference, so measuring from the body would produce inconsistent results.
I depress my strings and the final fret and measure. Treble side 2.25mm distance between string and pickup and 3.25mm on bass side. Very close to Fender’s recommendations.
Ok that does make sense. Thanks.