An even simpler visual representation of Phainon's situation while his loop is ongoing (more detailed explanations in the post)
That's how a feedback loop works!
Basically when Phainon triggers a new loop, it causes the temporal flow and world themselves to become cyclical. An earlier output or "memory" is used as an input, so naturally the same structure revisits itself and becomes completely closed, resulting in the famous shape that Amphoreus takes: the mobius strip, that you can see in Phainon's trailer as well for example. This affects everything involved in the simulation, no exception, and works around the fact that they stay the same continuous existences across loops (otherwise this breaks the principle).
(TWO VERY IMPORTANT THINGS TO NOTE: 1)* Nothing is ever erased causally, nor undone. The reset that Phainon provokes does NOT rewind time. The past is immutable in the sense of "what has happened has happened and cannot be erased" (which is also something mentioned by Phainon in 3.4), forever part of the causal chain. The entire Eternal Recurrence itself is a giant unbroken cycle of cause-and-effect, which is why Cyrene must ensure that NO GAPS are present in the *entire Recurrence. Phainon also doesn't really time travel the way some people think, he continues his trajectory across a temporal flow that is cyclical in nature.
2) Remembrance and actual memories (as in, the ones directly in their owner's mind) are related to three things in HSR lore, which is talked about in story, dialogues, and the data bank: consciousness, time, and causality (and basically existence itself, which is why the Cosmos can be genuinely brought back during 3.7). They're never just "viewed", aside of when it comes to an outsider like what happens to the TB in 3.4, who gets pulled into Phainon's memories and isn't having the greatest time either. In Amphoreus, the entire environment is memoria-encrypted (mentioned in the logs, and also why it's repeated countless times that Amphoreus is also made of "memories" and memoria), with the signals/processes and data GENUINELY also taking this form inside, it's a sort of dual nature (which is why they're able to TRULY be saved in 3.7), and Amphoreus carries the entire package of Remembrance.)
Because time still flows, every recurrence has different events, like more depth added to the same continuous structure. But everything is linked together, unbroken the entire time, which is why it's one general never-ending cycle, as Lygus puts it. Everything is continuous and accumulates.
As the enactor of the loop, Phainon's enactor lifetime naturally persists when the new cycle is triggered, it happens through his action. But since he's part of the world itself, he's naturally also enacted on by the loop. This results in Phainon's personal loop or cycle being ongoing, which is what you witness inside the simulation: the "Reaver" and "Phainon" situation, and no problem with Phainon interacting with himself in such a structure and "temporal flow" (rather, it's even expected for him, he's basically a living visual representation of the loop). This is also what his "self-iteration in progress" in his story II refers to, it's basically another term for "feedback loop", which as you can see is still ongoing for him. And this occurs every time he starts a new recurrence.
In this surface, as you can see, the labels of "past" and "future" overlap because it's circular and closed, which is also reflected in story dialogue (for example, Phainon refers to the next cycle as the "future" at some point, but later on refers to it as the "past" as well). And because the structure is closed, causality propagates either way, without any mean to stop it until completion. Here, in terms of labels, "Khaslana" and "Phainon" are BOTH the "future" and the "past" lifetime of the other, which is again possible thanks to the structure of the loop, the nature of the simulation, and the "temporal flow".
As a result, the dead Phainon is guaranteed to come back to life as the survivor Phainon (the loop's completion requires this, and it WILL complete), regardless of the order, which we are even shown at the vortex in Khaslana's memories and mind. As you see, all his lifetimes as "Phainon" are present inside, including of early ERs where "Phainon" was the one to die. Same reason why Phainon cannot tell who died at the end of ER1: once he forgets that "detail"? He has absolutely no way to tell, because he has lived those two lifetimes, recovers his memories, and comes back to life either way.
The way it happens also doesn't matter: it can be through the Ceremonial blade, but also Phainon's own sword for example (as shown in ER1 or ER33,550,335, the one in Phainon's trailer). It's simply causality doing its job, and the VERY moment Phainon provokes a new cycle and it starts? His own existence also becomes heavier.
This is also why the memories of "Phainon" in ER33,550,336 are revealed to ALREADY be part of Khaslana's memories and unrestricted mind at the vortex in his memories, or why "Phainon" has subconscious memories and awareness of the cycles (last two pictures): because they're the same existence and mind at different points across this closed structure. There's just a restriction of explicit visibility depending on which lifetime Phainon traverses, until his loop is completed.
Phainon's window of action when it comes to breaking the loop happens at one particular moment: AFTER his loop has completed, which is when he gets the choice of continuing the Recurrence or not, and when Lygus awaits him. In the end, what breaks the loop is Phainon throwing himself out of the cycle: he has just enough time to trigger the reset, but while it's happening he ends up in Path space and cannot be loaded into the buffer, as shown in 3.4. After that, he's bound to Irontomb and not present in the cycle anymore.
And if there's not "Khaslana" present in the cycle to get enacted on by the loop by he himself provokes? Well, naturally no "Phainon" can be born, which is exactly what happens in the last ER, and what Herta explains: Phainon as a signal is completely absent from it, and the sim is going through a "uh oh" moment, resulting in it allowing the TB to step in for Phainon as they meet the condition for the Worldbearing path.
As as last note, some might have noticed this, but Phainon is a direct parallel to Cyrene when it comes to self-interaction. What sustains their respective loops is different, but both loops are closed in structure, and allow both Phainon and Cyrene to literally interact with themselves, across lifetimes that are parts of the same continuous existence (and of course, Cyrene gets the combo of the ER + her personal loop that she's trapped into).