Maximum flow with edge demands: can't understand the example of transition to transformed graph in the lecture notes
Those are just typos, as you can confirm by reading the general construction on the previous page ("Intuitively, we construct $G'$ by ...") and applying it to the flow network on the left.  Yes, there are multiple off-by-one errors.  It happens. Pobody's nerfect.

Incidentally, you might want to read the latest version of his notes, available from http://web.engr.illinois.edu/~jeffe/teaching/algorithms/, rather than the 2009 version you're reading right now (though this particular typo is still present).