you're not seeing things. it's not a photoshop edit. that is my moonkin hatchling flying. :D blizzard sure snuck in a lot of surprises for this patch! this is yet another undocumented change for patch 4.0.6. whether or not it was intended... well let's just hope it stays this way! XD
it may take a moment for the moonkin hatchling to get off the ground, but once in flight mode this companion WILL fly along side your flying mount and/or flight form. when on the ground, it will proceed to waddle next to you as normal.
this makes me overjoyed to no end since it's so ridiculous it just works! who knew something so chubby and full of fluff could fly so high and so far? :P