The idea in
tdilf 's figure is that ideally you want the outside diameter of the tire to be the same, as this preserves the handling properties of your bike while enabling you to use wider tires. So if you normally run 700c x 28mm tires, you would want to run 650b x 48mm tires to preserve the handling properties of the bike.
On the other hand, you can use wheel diameter to tweak ride quality. If you have something like a heavy-duty touring bike, which is built around the assumption that you will ride it fully loaded, you might want to use smaller wheels and tires to make the bike more responsive when unloaded.