So probably the confusion comes from wording used by kata description. You read "tail" as a tail of a list (i.e. its last node), while description means the tail as "this loose end hanging out of the circular loop". I thought the image would be explanatory enough, but apparently it is not.
Another potentially confusing thing is that description says that there's always a tail, while in some cases it's possible to have only a loop, without a tail.

I will think how to make the description less confusing, and if you have any proposal for wording, let me know.

How exactly is this confusing?
Such situation happens when the loop consists just of a single node. Do you mean that such tiny loops can be confusing?