I guess I was confused by this:

So if you have your passphrase (and we haven’t deleted your encrypted mnemonic), you don’t need to separately store your Spark mnemonic

So, what you mean is that if we have our SN passphrase and we forgot our Spark mnemonic, we can still operate our Spark Wallet on SN, including withdrawing funds.

However, if we lose the Spark mnemonic and somehow SN goes down, then we won't be able to recover those Spark wallet funds, correct?