In the picture below, I am told that points a and b represent different kinds of discontinuities.
Point a is discontinuous since the point limit of $f(x)$ as $x$ tends to $a$ doesn't exist. That does sound quite cryptic, my interpretation is that since $f(x)$ doesn't tend to $a$ when $x<a$, that point can't be regarded as continuous.
I'm more confused about point $b$ though. The book states that since this point cannot be continiuous since $A\neq f(b)$.
I am having a hard time comprehending this statement, surely at point $b$, the function $f(x)=f(b)$ by definition?

Yes, obviously $f(x)=f(b)$. However, the limit of the function when $x\to b$ is not $f(b)$. As you can see the values of $f$ near the point $x=b$ (not at the point itself but at its neighborhood) are very far from $f(b)$.