The link failure is also detected on SW1 however, the example examines the behaviour of the ports on SW3.
In the diagram, @ReneMolenaar still has the (D) showing up on port fa0/17 on SW1, and this should be removed. I will inform him…
SW3 does sent a TCN to SW1 but not necessarily immediately. Note the
SW3# STP: VLAN0001 Fa0/14: root port delay timer active debug line.
The last diagram does not indicate what the states of the ports on SW3 are in order to make a point of determining them from the debug. As mentioned in the text: "You can see we don’t immediately switch back to interface fa0/14. There’s no reason to switch back to this interface ASAP because we have a working root port."
Eventually, the Fa0/16 does become blocked and the Fa0/14 does become the root port with a cost of 3019.
I hope this has been helpful!