First form the singleton set and then use to take a set union:
The unused second argument of may be any term. Since , a term using only the prescribed operation symbols is
After substituting the displayed term for both occurrences of , this is literally a term in , and its value is .
Work in the ambient universe and let . Suppose
For each , let be this unique witness. The relativization is a first-order formula, so the ambient Axiom schema of replacement collects the witnesses into a set. Every witness lies in the constructible hierarchy, hence there is an ordinal such that
For example, take the supremum of one constructible rank for each witness and then increase it by one.
The set itself belongs to . Taking , every has a witness satisfying . Therefore
which is the stated instance of Replacement.
Suppose . If , then for some countable ordinal . The set is transitive and countable, so the transitive closure of lies in a countable set. Thus is hereditarily countable, proving
Conversely, let and choose a sufficiently large containing . By the Downward Lowenheim-Skolem theorem, there is a countable elementary substructure that contains every member of . The Mostowski collapse theorem gives a transitive collapse of , and the condensation lemma for the constructible universe identifies it with for a countable ordinal . Because contains the transitive closure of pointwise, the collapse fixes . Thus . Hence

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