In the sentence starting with

Types whose methods need access to their module instance will be converted to heap types[...]

please emphasize (bold!) "whose methods need access to their module instance".

Also emphasize this paragraph:

"Static types that do not need module state access, and have no other reason to be converted, should stay static."

I hadn't noticed the qualification in the first sentence and had assumed all types were to be converted, until I came across the second at the very end of the section (where it is easily overlooked by lazy readers :-).