It is a 6 st repeat. I still count 6 st worked in Round 3.
Some of the stitches within the 6st repeat 'change their hat' as the rows proceed, but there are 6st still.
To answer your question about Round 3: this is a diagram of Round 2
, which begins with a K2T yo yo
...and ends with a P2!
Notice...when you get to the stitch marker after completing Round 2...Round 3 begins with the K2T yo yo's. You bump right into them!
You are working 'in the round'...not flat. Perhaps that's what confused you?
It is a wonderful pattern stitch! I love it. So cushy looking!