The chapter closes by inverting the vertical language it has been using: the strong and great take the lower position, and the soft and weak the higher.
That reverses the book's usual arrangement, and the reversal is deliberate. Everywhere else the recommended position is the low one. Water goes to the places people despise. Rivers are kings of the valleys because they lie beneath them. A great state is a low-lying estuary. Rulers call themselves orphaned and unworthy. The whole apparatus of the text places what is valued underneath.
Here the strong are put underneath and the soft on top, and the sentence only makes sense once you notice it is not about status. It is about a tree. The rigid part of a tree is its trunk, at the bottom, and the soft part is the new growth at the crown, and the chapter has just been talking about grass and timber. The vertical arrangement is botanical.
Read that way the closing line completes the argument rather than contradicting it. What is strong is the old wood, load-bearing and finished growing, and what is soft is where the tree is still extending. A person or a state can be either, and the chapter has already said which of them is a companion of death.
The line has also been read as a plain statement of rank reversal, in which the strong end up below and the yielding above, which suits the book's general politics. Both readings are current, and the ambiguity is in the Chinese rather than introduced by translation.