A sidenote is a scrap of text set in the margin of the page to give the reader a clue as to the topic of the adjacent text. Some old nonfiction books use sidenotes extensively. They are sometimes seen in modern academic journals. The content of a sidenote is brief, often not a complete sentence.

The DP Guidelines tell proofers to code sidenotes as [Sidenote: text] and to place them above the paragraphs they describe, if possible. (Proofers couldn't do that when the paragraph was continued from a prior page.) Some Project Managers tell proofers to leave a sidenote embedded in the paragraph, just preceding the sentence it describes.

You would like to put sidenotes above the paragraphs they describe if possible, but where the notes were embedded in a long paragraph, that isn't practical. The intent of the sidenote is to help the reader find a topic; to be effective, the note must be close to the topic. So a sidenote should not be moved more than a handful of lines from its topic sentence. Wherever you put the sidenotes, you must worry about what rewrapping will do to them.

Above the paragraph. There must be a blank line between the sidenote and its paragraph, or it will be wrapped as part of the text of the paragraph. If there are two or more sidenotes above the paragraph, there must be a blank line between each, or the notes will be wrapped as paragraph.

Inside the paragraph. If a sidenote is within a paragraph, it will be wrapped as part of the text of the paragraph, so:

...sentence one grinds to a halt. [Sidenote: Another point.] Sentence two groans out of the starting blocks.
You can prevent that by putting a blank line above and below the note, so:
...sentence one grinds to a halt.

[Sidenote: Another point.]

Sentence two groans out of the starting blocks.
That, in effect, splits the paragraph into two paragraphs. You might argue that the author ought to have done just that—but he didn't. Whether or not to do this is an editorial decision you should take in consultation with the Project Manager for the book.

Note that none of these problems affects the HTML display of sidenotes. Using HTML and CSS, you can convert each sidenote into a span that displays in the margin, like the original.

The Fixup> Sidenote Fixup menu choice performs global changes throughout the document. It converts "sidenote" to "Sidenote"; and it moves any sidenote that is not already surrounded by blank lines up to precede the paragraph it touches with blank lines above and below it.