[guided]The point of model completeness is to prove preservation of all first-order formulas under embeddings. Quantifier elimination gives a stronger normal form: every formula is equivalent, over real closed fields, to one with no quantifiers. We apply that theorem to the specific formula $\varphi(x_1,\dots,x_n)$.
Thus there is a quantifier-free formula $\psi(x_1,\dots,x_n)$ satisfying
\begin{align*}
\operatorname{RCF} \models \forall x_1 \cdots \forall x_n\,
\bigl(\varphi(x_1,\dots,x_n) \leftrightarrow \psi(x_1,\dots,x_n)\bigr).
\end{align*}
The hypothesis needed here is exactly that we are working in the theory $\operatorname{RCF}$ in the ordered-ring language. Since $K$ and $L$ are real closed fields, each is a model of $\operatorname{RCF}$, so the displayed equivalence holds inside both structures. Hence, for each tuple $a = (a_1,\dots,a_n) \in K^n$,
\begin{align*}
K \models \varphi(a_1,\dots,a_n)
&\Longleftrightarrow
K \models \psi(a_1,\dots,a_n),
\\
L \models \varphi(\iota(a_1),\dots,\iota(a_n))
&\Longleftrightarrow
L \models \psi(\iota(a_1),\dots,\iota(a_n)).
\end{align*}
It remains only to prove that the embedding $\iota$ preserves and reflects the quantifier-free formula $\psi$.[/guided]