 Solution

The alcohol first attacks CDI, forming an activated O-carbonylimidazole derivative. Its departure gives the resonance-stabilized propargyl/allenyl cationThe ortho amino nitrogen attacks the central carbon of the allenyl system, closing the five-membered indole ring. Electron redistribution and loss of the N-H proton establish the indole aromatic system while leaving a carbene at the original distal, phenyl-bearing alkyne carbon.

For atom tracking, the original carbinol carbon becomes indole C3, the proximal alkyne carbon becomes C2, and the distal $\mathrm{C}(\mathrm{Ph})$ becomes the exocyclic carbene. Attack at the distal alkyne carbon would make a six-membered ring and cannot give the displayed skeleton. This carbene-based rearrangement has a primary experimental precedent.^[ref]