Does diffuse mean that there is no reflection and refraction ? Is that why the object appears just as its boundaries are ?
From the previous slide diffuse means that the reflection is uniform in all directions. So there is reflection going on. I don't think there's any refraction in this scene because the light isn't passing through different mediums. If the pot were made of some transparent glass and then filled with water there would be refraction, but this surface is just diffuse.