For $f(x)$, the existence of $f'(x)$ implies the continuity of $f(x)$. And I am assuming that it also implies the continuity of $f'(x)$.
My question is why in a function $g(x,y)$, is the existence of $g_x$ and $g_y$ not sufficient condition for the continuity of $g_x$ and $g_y$ and hence the continuity of the function?
To me, it seems existence of $f'(x)$ and $g_x$ should either both imply continuity of $f'(x)$ and $g_x$ or not. Why are they different in each case?
The counterexample that shows existence of $f'$ does not imply continuity of $f'$ is
$f(x) = \begin{cases} x^2 \sin(1/x) & x \neq 0 \\ 0 & x=0 \end{cases}$
This is different than the point of the text, this addresses a conclusion you jumped to.
The point of the text is that even if partials exist everywhere, the function could still not be continuous, due to the behavior at directions other than horizontal/vertical. Something to consider is $xy/(x^2+y^2)$ or something (good in $x$ and $y$ direction at origin but not for others).