It seems to me that they do not want you to work the yarn over that you make in Round 4, simply remove the stitch from the needle (but do not place it on the right hand or working needle). It will probably look like a little bar in between the ribbing. Kind of like the "Clapotis" in Knitty. HTH.
Judge: Madame, either you will have to cease knitting or I will have to cease judging. Which shall it be?
Miss Marple: It helps me to concentrate, milord.
Judge: It does not help me, madame.
Miss Marple: Oh. Very well. (puts away knitting)
Judge: Thank you, Madame.
The lyf so short, the craft so long to lerne.
~ Geoffrey Chaucer - The Parliament of Fowls Line 1.