As one of the commenters on the linked article points out: this still breaks if you try to drag and drop text into the textbox unless you've been very diligent with the events to move the label out of the way.
I never really thought why they were called 'placeholder' before but it makes sense; they are not labels, they are examples.
I've seen placeholders implemented as a separate element, positioned over the input with CSS, which neatly sidesteps most of the issues caused by having the placeholder text actually as the input value. It has its own problems, no doubt, but seems to work a lot better overall.
I never really thought why they were called 'placeholder' before but it makes sense; they are not labels, they are examples.