In fact, coding in paragraphs and factoring chunks of code into separate functions are not mutually exclusive or contradictory; coding in paragraphs facilitates such factoring.
It's very easy to generate code that "jumbles" tasks. You set "x" coordinate of your point in one place, then do some calculations for "y" coordinate, then set it, then do something unrelated, and then set the color of your point. Such code does not make it obvious that you could create a "set_point(y, y, color)" function.
When coding in paragraphs, you organize your code into chunks so that each one "does one thing and does it well". It's natural then to consider whether a particular chunk could be a separate function.
Often it is, but sometimes it is not. First, creating a separate function has costs: choosing an appropriate name, designing an interface, etc. If the name and/or interface are not well-designed, a separate function can decrease readability: consider a function called "fix" that has 10 positional arguments...
Second, especially if your chunk is within a loop or two, the code may be too tightly coupled with the state within your code. You would need additional and perhaps modifiable "state" parameters to your function, making the resulting code more complicated and less comprehensible than the original one.
And of course, if your hypothetical function cannot be inlined (perhaps because your language does not even have the facility, or for other reasons), you would pay the price of a function call, which may matter in a tight loop.
In general it's always good to consider factoring chunks of code as a separate function, but sometimes upon this consideration you should reject it.