[guided]The goal of this step is to produce a point $y\in W$ whose image at some time is far from the corresponding image of the periodic point $r$. The two reference periodic orbit sets $P$ and $Q$ are separated by distance $\eta$, and $\varepsilon=\eta/16$ is much smaller than that separation.
Fix a residue $i\in\{0,\dots,m-1\}$. The point $f^i(r)$ cannot lie close to both $P$ and $Q$. Indeed, if there were points $a\in P$ and $b\in Q$ such that
\begin{align*}
d(f^i(r),a)<2\varepsilon
\end{align*}
and
\begin{align*}
d(f^i(r),b)<2\varepsilon,
\end{align*}
then the triangle inequality would imply
\begin{align*}
d(a,b)\leq d(a,f^i(r))+d(f^i(r),b)<4\varepsilon=\frac{\eta}{4}.
\end{align*}
This contradicts the definition of $\eta$, because every point of $P$ is at distance at least $\eta$ from every point of $Q$.
Therefore, for each residue $i$, at least one of $P$ or $Q$ is uniformly far from $f^i(r)$. Choose one such orbit set and call it $A_i$. Thus $A_i\in\{P,Q\}$ and
\begin{align*}
d(f^i(r),a)\geq 2\varepsilon
\end{align*}
for every $a\in A_i$.
For every non-empty subset $A\subset X$ and every point $z\in X$, define the distance from $z$ to $A$ by
\begin{align*}
\operatorname{dist}(z,A):=\inf\{d(z,a):a\in A\}.
\end{align*}
Now define the open $\varepsilon$-neighbourhood of this chosen finite orbit by
\begin{align*}
V_i:=\{z\in X:\operatorname{dist}(z,A_i)<\varepsilon\}.
\end{align*}
This set is non-empty and open because $A_i$ is non-empty and the function $z\mapsto \operatorname{dist}(z,A_i)$ is continuous on the metric space $X$.
We now use the residue-refined topological transitivity hypothesis to send a point of $W$ into one of these open neighbourhoods at a time compatible with the period of $r$. Choose any residue $j\in\{0,\dots,m-1\}$. Applying the residue-refined hypothesis to $W$, $V_j$, the modulus $m$, and the residue $j$, we obtain a point $y\in W$ and an integer $N\in\mathbb{N}$ such that $N\equiv j\pmod m$ and
\begin{align*}
f^N(y)\in V_j.
\end{align*}
Equivalently, $N=am+j$ for some integer $a\geq 0$.
By the definition of $V_j$, there exists $a_j\in A_j$ satisfying
\begin{align*}
d(f^N(y),a_j)<\varepsilon.
\end{align*}
Since $r$ has period $m$, the equality $N=am+j$ gives
\begin{align*}
f^N(r)=f^{am+j}(r)=f^j(r).
\end{align*}
Finally, the point $a_j$ lies in the orbit set chosen to be far from $f^j(r)$, so
\begin{align*}
d(f^j(r),a_j)\geq 2\varepsilon.
\end{align*}
The triangle inequality therefore gives
\begin{align*}
d(f^N(y),f^N(r))=d(f^N(y),f^j(r))\geq d(a_j,f^j(r))-d(f^N(y),a_j)>\varepsilon.
\end{align*}
This is the needed separation between $y$ and the periodic comparison point $r$ at the same iterate $N$.[/guided]