First: which letter is a marker
— 1.3.3: a final consonant in an उपदेश (a form as the grammar states it, before any rule has applied) is an इत्. In अइउण् the final ण् is therefore a marker; the sounds being taught are only अ इ उ.
Second: markers vanish
— 1.3.9: what has been called इत् is elided. It leaves no trace in any form, but it has already done its job by being there for the naming.
Third: the naming convention itself
— 1.1.71: an initial sound together with a following इत् denotes itself, that marker, and everything between. That is the entire mechanism.