I was struggling with the same issue.

I suppose this is the innovation here:

"Only two on-chain transactions occur across the instrument’s lifetime regardless of the number of transfers"

So you could send Bitcoin to an address and then, even if the issuer key isn't deleted, be confident that two leftover keys are a bearer instrument.

But I'm unclear how you know that a precious holder has not retained their keys.

I'm not the one to explain, I'm just here to 'listen'.

https://zenodo.org/records/19382670/files/mbi_whitepaper.pdf