For Allinson the butterfly image is the perfect image for the Zhuangzi because it represents an internal transformation to 'beauty' from 'ugliness' -- though he insists on calling caterpillers ugly when I find them rather cute and fuzzy. I always like to see them crawling around, you know, devil-may-care, along the sidewalk. I could crush their little guts out if I wanted, but I don't because I'm a nice guy. Poor little things.
He also points out how transient the butterfly is. The self-transformation is itself very delicate and could be 'broken quite easily'. Any state of mind, even the state of enlightenment, is therefore impermanent. You can lose it by forgetting the lessons of the zhuangzi. Now, I know what you're saying: the whole point is to forget that there are lessons to begin with... There are no lessons. Just hang out and be spontaneous. But this is easily forgotten. Next thing you know you're squashing metaphorical caterpillars by the side of the road before they can become beautiful butterflies, flying around and stuff. Well, sorry, but I feel like a jerk today. Sue me.