Here is Connie Risjord's (the author of the Literary Manual)response to this question:
I suspect the EBAE rule that requires names of ships, pictures, etc., to be italicized separately was written to accommodate multiple-word titles – and I think it all has to do with readability. The second example perhaps demonstrates this better than the one listing names of hotels:
Read: East Side, West Side; Little Women; and Babbit.
Notice how the reader is able to keep all of the words of the first title together. Had the double italics run all the way through to “Women” the reader would have to pay very close attention to the separating punctuation in order to get meaning from the sentence.
On the other hand, when you have a list of names, such as the birds in the manual, readability would not be an issue.
Thank You Connie.