It measures memory usage from the lz4 command line utility, without mentioning it. This is completely different from lz4 algorithm.
Effectively, it measures input / output buffers, which are external to lz4. Plus it uses highest settings for such buffers, also without mentioning it. Using -B4 setting, for example, would reduce I/O buffer memory by a 50X factor.
and that's it. Decompression doesn't use any memory, only the I/O buffers.
On the compression side, the memory cost is : + buffer for compression (typically == size of data to compress) + 16 KB for tables
And that's it.
We are very very far from the 12 MB mentioned.