Alan Mackenzie <acm@muc.de> writes:

> @@ -1743,9 +1743,17 @@ Overlay Properties
>  However, doing this can sometimes confuse the internal
> +mechanism that calls all these hooks, leading, for example, to calling
> +them recursively, which is usually unwanted.

> @@ -3621,9 +3621,14 @@ Special Properties

> +When Emacs calls these functions, @code{inhibit-modification-hooks} is
> +set to @code{nil}.

As Phillip mentioned in the OP, Emacs in fact binds it to t.

> If the functions modify the buffer, you should
> +consider binding this variable to non-@code{nil}, to avoid confusing
> +the internal mechanism that calls these hooks.  @xref{Change Hooks}.

I find this "confusing the internal mechanism" thing unhelpful, how
about this instead: