Quick question about debugging circle bodies

[gregkarber 1]

I am trying to fix a problem with a circular body falling between rectangular bodies, so I was debugging it, and I noticed that my main sprite body looks like below (I have made the sprite itself invisible so that you can see the debug body).

It seems that the radius in that image shows the actual boundary of the body, not the circle. Previously, when I've done this, the radius touches the edge of the circle.

So, my question is, what is going on in this picture? What do the circle and the radius represent? I know this is a pretty fundamental thing, but I'm lost, so -- going forward -- is there any place/book/text I should use to figure out basic things like this in the future?

Thank you very much for any help!