I know this is an older thread, but my question is right along the same lines, so I thought I would post here, rather than making a new thread.
In a book I am working on, I have two italicized paragraphs (where we are retaining the italics). The first has only two words and the second has three words. From Dan's response above, it sounds like both paragraphs would use passage indicators, rather than word indicators for the first paragraph and a passage indicator for the second one. Is that correct?