[guided]The point of this step is to justify that a unit integral flow is not merely analogous to a collection of paths; it actually decomposes into edge-disjoint paths.
Start with pairwise edge-disjoint directed paths $P_1,\dots,P_m$ from $s$ to $t$. Define a function $f:E \to \{0,1\}$ by setting $f(e)=1$ when $e$ belongs to one of $P_1,\dots,P_m$, and setting $f(e)=0$ otherwise. Because the paths are edge-disjoint, no edge is counted twice, so $f(e)\le 1=c(e)$ for every $e\in E$. At an intermediate vertex $v\in V\setminus\{s,t\}$, every time one of the paths enters $v$, the same path later leaves $v$ along exactly one outgoing edge. Thus the total incoming contribution and total outgoing contribution at $v$ are equal, so $f$ satisfies flow conservation. At $s$, each of the $m$ paths contributes one net unit leaving $s$, and therefore $|f|=m$.
Now suppose instead that $f:E\to\{0,1\}$ is an integral $s$-$t$ flow of value $k$. Define its support by
\begin{align*}
E_f=\{e\in E:f(e)=1\}.
\end{align*}
We show that $E_f$ contains $k$ edge-disjoint directed paths from $s$ to $t$. The proof is by induction on $k$. For $k=0$, the assertion is empty. Assume $k\ge 1$, and let $R\subseteq V$ be the set of all vertices reachable from $s$ using only edges in $E_f$. Why must $t$ lie in $R$? If $t\notin R$, then no edge of $E_f$ can leave $R$, because such an edge would make its head reachable. Summing the conservation law over all vertices of $R\setminus\{s\}$ cancels every edge with both endpoints in $R$, leaving only boundary terms:
\begin{align*}
\sum_{e=(u,v)\in E,\ u\in R,\ v\notin R} f(e) - \sum_{e=(u,v)\in E,\ u\notin R,\ v\in R} f(e) = k.
\end{align*}
The first sum is $0$, since no positive-flow edge leaves $R$. The second sum is nonnegative. Hence the left-hand side is at most $0$, contradicting $k\ge 1$. Therefore $t\in R$, so there is a directed $s$-$t$ path $P$ contained in $E_f$.
Let $f_P:E\to\{0,1\}$ be the indicator function of the edge set of $P$, and define $f_1=f-f_P$. Since every edge of $P$ lies in $E_f$, the function $f_1$ still takes values in $\{0,1\}$. Subtracting one directed $s$-$t$ path preserves flow conservation at every intermediate vertex and lowers the value by exactly $1$, so $f_1$ is an integral $s$-$t$ flow of value $k-1$. The induction hypothesis gives $k-1$ edge-disjoint directed $s$-$t$ paths in the support of $f_1$, and adding $P$ gives $k$ such paths in the support of $f$.[/guided]