Created attachment 180505 [details]
test of character position with padding and-or borders added to characters
Two interrelated questions here.
1. In relation to positioning objects anchored ”to character”:
What is the expected behavior for the size of the ”character” region in relation to padding: Should padding always be included? Or only when there is a border?
Attachment contains a simple test case suggesting that the latter is the ”actual” behavior --
-- but what is/should be the ”expected” behavior in character positioning?
2. In relation to ”online help” for character padding:
Does character padding always affect spacing around characters? Or only when borders are included?
There is a suggestive statement in a guide page for character borders :
”Select the distance between the border lines and the selected characters in the Padding area. You can only change distances to edges that have a border line defined.”
but the help for padding  is ambiguous about whether a border must be explicitly added for padding to apply to ”character”.
Specify the amount of space that you want to leave between the border and the contents of the selection.”
Note that  applies both for ”paragraph” and ”character”. In my experiments, ”padding” (w/o borders) does add space to text in ”paragraphs”, but NOT for ”character”.
If that is the expected behavior, then the help page should probably include this information.
(could not find other information about "padding" and "character" in online help.)
Primarily seeking clarifications for the sake of documentation. Others must decide what is "expected" behavior and whether there are deviations from that expectation in the current implementation.
Try choosing menu Format - Paragraph - Alignment tab - Text-to-text, Alignment:
If set to Bottom, all blue rectangles will be aligned vertically.
Tested with version 126.96.36.199 on Linux.
(In reply to LeroyG from comment #2)
Thanks Leroy. The first question in the OP is about the "Character" option in the "to" control in the Position and Size dialog for shape. The issue is not to align the shapes across the big letters, but to explain, for each letter, the size of the "Character" area used in the Position and Size dialog for positioning the shape, and how that area interacts with padding and borders applied to the different letters (as described above each letter). The different big letters in the attachment are provided to show examples of that interaction. (I should have made these points more explicit from the start.)
Your example is interesting, but uses another positioning feature in a different dialog than the OP.
The question is whether an object anchored horizontally left To Character and vertically at the Bottom should follow the bottom padding/spacing of this character. I'd say yes.
Opening this document in MSO breaks the position of blue/aqua rectangles.