At this point, you should understand how each commit creates an entirely new filesystem tree (called a “revision”) in the repository.
Does this mean if a some one changes index.jsp page (in a Java web application for example), SVN will copy the entire project folder and increase the revision number?
Is this operation happens for every change?
I don't know but I got the feeling it is expensive approach.
The text you quoted is in regard to branching and merging. Changing a single JSP file does not involve either a branch or a merge, thus there is no new directory tree. When checking in a text file the only thing that will be added to the repository is the difference between the current version and the previous version of the file. And the revision number does change for the whole repository.