This is a confusing concept, as acknowledged in the paper you cite, "On the definition and computation of rectilinear convex hulls" (Elsevier link).
[![WikiImage][1]][1]
(Image from [Wikipedia](https://en.wikipedia.org/wiki/Orthogonal_convex_hull).)
It may help to look at this more modern paper:
Alegría-Galicia, Carlos, Tzolkin Garduño, Areli Rosas-Navarrete, Carlos Seara, and Jorge Urrutia. "Rectilinear convex hull with minimum area." In Computational Geometry, pp. 226-235. Springer Berlin Heidelberg, 2012. (PDF download.)
Excerpt from A-G et al.:
[![OrthoHull][2]][2]