The term is not free for substitution for . The occurrence of in is under , which would capture the inserted . The other occurrence, in the outside disjunct , has no enclosing quantifier. The inner does not bind the occurrence of in its antecedent, so it creates no additional capture at that substitution site.
Rename the bound to a fresh , then carry out capture-avoiding first-order substitution. The result isThe inserted in remains free because it lies outside the scope of . One may additionally rename that bound for readability, but it is not necessary for correctness.
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