MLPPPoX encapsulation, fragmentation and interleaving are performed by the LNS in BB-ISA. According to the example, a large low priority packet (P1) is received by the BB-ISA, immediately followed by the two small high priority packets (P2 and P3). Because the requirement stipulates that there is no more than 50ms of transmission delay in the last mile (including on-the-wire overhead), the large packet must be fragmented into three smaller fragments each of which do not cause more than 50ms of transmission delay.
The BB-ISA would normally send packets or fragments to the carrier IOM at the rate of 10Gb/s. In other words, by default the three fragments of the low priority packet would be sent out of the BB-ISA back-to-back at the very high rate before the high priority packets even arrive in the BB-ISA. To interleave, the BB-ISA must simulate the last mile conditions by delaying the transmission of the fragments. The fragments are be paced out of the BB-ISA (and out of the box) at the rate of the last mile. High priority packets can be injected in front of the fragments while the fragments are being delayed.
In Figure: Packet route from the LNS to the RG (point 2) the first fragment F1 is sent out immediately (transmission delay at 10G is in the 1us range). The transmission of the next fragment F2 is delayed by 50ms. While the transmission of the second fragment F2 is being delayed, the two high priority packets (P1 and P2 in red) are received by the BB-ISA and are immediately transmitted ahead of fragments F2 and F3. This approach relies on the imperfection of the IOM shaper which is releasing traffic in bursts (P2 and P3 right after P1). The burst size is dependent on the depth of the rate token bucket associated with the IOM shaper.
This is not applicable for this discussion, but worth noticing is that the LNS BB-ISA also adds the L2TP encapsulation to each packet or fragment. The L2TP encapsulation is removed in the LAC before the packet or fragment is transmitted toward the AN.