SO book describes incident in a strange manner. The definition is incorrect and contains a short description of the process as well. The process description contain also events. It looks like the author did not know or understand what the V2 definition of incident is and forgot to edit the definition.
The box on page 46 states:
In ITIL terminology, an ‘incident’ is defined as:
An unplanned interruption to an IT service or
reduction in the quality of an IT service. Failure of a
configuration item that has not yet impacted service