I understand that a classical bar magnet will precess about the axis of an external magnetic field. Whilst researching NMR, I have read that nuclei with half-integer spin which are subject to an external magnetic field can occupy two possible states; spin-up and spin-down. In the spin-up state, the magnetic field generated by a nucleus is parallel to the external magnetic field, and in the spin-down state, the magnetic field generated by a nucleus is antiparallel to the external magnetic field.
Here is a diagram:
As you can see, the magnetic fields of the nuclei are exactly parallel or antiparallel to the external field. In my understanding, this means that they cannot precess about the external magnetic field. It seems invalid to use a model of precession in this case, yet the model is used successfully to explain NMR, what's going on?