Sorry, I couldn't post the image from the phone, TinyMCE isn't loading.It does, but since you have no mouse, you can not "hover"; ergo, only click (touch).
This is an issue not limited to iPhone, until some sort of delay.state is introduced in webkit.
TinyMCE does have iPhone/iPad support, since 3.2.4. (r.isIDevice=/(iPad|iPhone)/.test(f)) I know there were a few issue with WebKit, so this might be contributary. We're out by 0.0.2 versions of TinyMCE.It probably isn't recognized as modern browser, or fully Safari, so it falls back to 'working version', for say IE6, etc.
I remember during the internal demo that it was mentioned they haven't had time yet to dive fully into the mobile part of things.