[proofplan]
We collect all formulas satisfying the predicate $P$ into a subset $S$ of $\mathsf{Form}$. The hypotheses say exactly that $S$ contains every atomic formula and $\bot$, and that $S$ is closed under each formula-forming connective. Since $\mathsf{Form}$ is defined as the smallest set with these closure properties, every formula belongs to $S$, which is precisely the desired conclusion.
[/proofplan]
[step:Collect the formulas satisfying the predicate]
Define the subset $S \subset \mathsf{Form}$ by
\begin{align*}
S := \{A \in \mathsf{Form} : P(A)\text{ holds}\}.
\end{align*}
By the hypothesis on propositional variables, every $p \in \mathsf{Prop}$ belongs to $S$. By the hypothesis $P(\bot)$, the formula $\bot$ belongs to $S$.
[/step]
[step:Verify that the set of satisfying formulas is closed under all connectives]
Let $A,B \in S$. By the definition of $S$, both $P(A)$ and $P(B)$ hold. The closure hypotheses for $P$ therefore give
\begin{align*}
P(A \land B), \qquad P(A \lor B), \qquad P(A \to B).
\end{align*}
Again using the definition of $S$, this means
\begin{align*}
A \land B \in S, \qquad A \lor B \in S, \qquad A \to B \in S.
\end{align*}
Thus $S$ is closed under the binary connectives $\land$, $\lor$, and $\to$.
Now let $A \in S$. By the definition of $S$, $P(A)$ holds. The closure hypothesis for negation gives $P(\neg A)$, hence $\neg A \in S$. Therefore $S$ is also closed under the unary connective $\neg$.
[/step]
[step:Use the minimality of the set of formulas]
The set $S$ contains $\mathsf{Prop}$ and $\bot$, and it is closed under the operations
\begin{align*}
(A,B) &\mapsto A \land B, \\
(A,B) &\mapsto A \lor B, \\
(A,B) &\mapsto A \to B, \\
A &\mapsto \neg A.
\end{align*}
The set $\mathsf{Form}$ is, by definition, the smallest set with exactly these closure properties. Since $S \subset \mathsf{Form}$ and $S$ has all the required closure properties, minimality gives
\begin{align*}
\mathsf{Form} \subset S.
\end{align*}
Together with $S \subset \mathsf{Form}$, this yields $S = \mathsf{Form}$.
[/step]
[step:Conclude the predicate holds for every formula]
Let $A \in \mathsf{Form}$ be arbitrary. Since $S = \mathsf{Form}$, we have $A \in S$. By the definition of $S$, this means that $P(A)$ holds. Because $A$ was arbitrary, $P(A)$ holds for every $A \in \mathsf{Form}$.
[/step]