If you move the ground node to the same location as in the appnote, or plot V(net1) - V(n003), you'll see the results you'd expect: the zener voltage minus the drop over D2.
If you want to build this, you must consider the whole circuit as dangerous mains, since the caps provide no galvanic isolation, and are probably not rated for line filters (X/Y), so they may be destroyed (or fail shorted) by transients.