= Solution
Hydride removes the remaining alpha <proton> at the substituted benzylic <carbon>, releasing <hydrogen> and forming the conjugated <enolate>. Its <oxygen> attacks the <carbonyl> <carbon> of allyl chloroformate. Collapse of the <tetrahedral intermediate> expels chloride and gives the \b[allyl <enol carbonate>], with the double bond between the original <carbonyl> <carbon> and the cyanomethyl-bearing <carbon>.
This is <O-acylation of an enolate>: the <carbonyl> <oxygen> is trapped as $\mathrm{OCO_2CH_2CH{=}CH_2}$, retaining the enol double bond. The competing carbon-centred resonance representation explains possible C-acylation in other circumstances, but it would give a different connectivity from E. The indicated product selects the oxygen-trapping pathway and the conjugated enolate regioisomer.
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