Your question has nothing to do with encoding. You are telling MVC (and the browser) to show a text area to edit that string, and that's what it's doing.
If you want an HTML editor with which your users can edit the HTML (while seeing it properly rendered), you should check this post:
What's the best WYSIWYG editor when using the ASP.NET MVC Framework?
Basically, you'll usually have to include the .js and .css of the selected editor, and activate it on the text area that you are currently sending to the broser. That will create an editor like the one you'll find in Wordpress, for example.
Edit:
Now that you have edited your question, I think you are misunderstanding what the book was referring to. When it says that your text has been encoded it means that the < > characters have been translated into & lt; and & gt; so that the browser doesn't treat them as "open HTML tag" and "close tag".
If you look at the source HTML in your browser, you'll see that the string has been properly encoded (as & lt; and & gt;).