So it is tolerant of partition and it sacrifices availability in favour of consistency. So it is CP, not CA.
But what does it mean to tolerate a partition? As if the system has a choice?
Any CA system is claiming to be consistent and available as long as the network doesn't partition. That's the strongest statement you can make under the CAP theorem, and Paxos certainly falls in that camp.
My problem with the original article was that it claimed that any individual network or node failure was a partition affecting the consistency or availability of the system. Paxos is a clear counterexample to that, as it tolerates a lot more than that without sacrificing consistency or availability.
Once the network actually partitions (or half the nodes become unreachable), then you are correct. The CAP theorem comes into play again and we must sacrifice either C or A, and Paxos chooses A.
Or does any system subject to hardware or power failure fail to count as "available"?