The scaled down rectangle should be narrower; it’s not scaled in this diagram, it’s squished.
(Yes I know you can ‘scale’ objects on one axis but that’s usually not how it’s taught on an introductory level. Standard scaling assumes object similarity, which is not present in the diagram’s ‘scaled’ rectangle.)
Scaling in 2D has 2 parameters, X and Y, in the example X was at 1 while Y was below 1. You are referring to a subset of scaling transformation where X = Y and the aspect ratio is kept.
And what about the arrow?
It’s pointing down diagonally, which - at least to me (and for pretty much any GUI I can think of) - indicates, that it should be affecting both axes.
Then again, that whole illustration isn’t all that great to begin with. So who knows, what that arrow is supposed to signify…
No, I wod say scaling is any diagonal matrix and thus even includes mirroring.