methyl fluorosulfonate alkylates the tertiary isoxazolidine nitrogen, giving a quaternary N-methyl ammonium salt; the methyl remains attached to nitrogen in F. hydride from lithium aluminium hydride then cleaves the N–O bond, releasing the corresponding oxygen as an aluminium-bound alkoxide while restoring neutral tertiary amine nitrogen. Aqueous workup protonates the alkoxide to give the alcohol.
Thus the C–O bond made in the cycloaddition survives as the alcohol-bearing C–O bond, and the formaldehyde-derived methylene survives as the extra carbon between nitrogen and the carbon framework. The N–O bond is the one removed. N-methylation followed by reductive N–O cleavage gives the bridged amino alcohol F without requiring cleavage of its newly formed C–C bond or hydrogenation of a nonexistent residual alkene.