This is a simple statement that the space between the earth and the moon can allow for the diameters of each planet to fit in between. Obviously it is not saying that such an arrangement would be stable for said astronomical bodies. Not at all “a misconception.”

Wouldn't that take even lesser space?

Now you have me wondering if there's any combination of paths that would have them all pass through that alignment and continue on their way after slingshotting around each other. And, if not, how many bodies could do that.

Or would they just stack up?