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dhAtos tan-nimittasyaiva

धातोस्तन्निमित्तस्यैव ONPANINI 61080

Replace root-final o ओ au औ with av अव् Av आव् before the y य्-affix that made the o ओ au औ.

As in —

lU लू + /yat'
→ lo लो + /yat', by gbS
→ !**lavya- लव्यॱ "cuttable", by this rule

Why do we say "that made the o ओ au औ"?

The name lUyamAna- लूयमानॱ is made by adding affix yamAna- यमानॱ aftr lU लू —

lUyamAna- लूयमानॱ + /iJ
→ lauyamAna- लौयमानॱ + /iJ by taddhiteSvac...
→ lauyamAn- लौयमान् + i इ by yasyetica
→ !**lauyamAni- लौयमानिॱ "a descendant of lUyamAnaH लूयमानः"

Here /vRddhi was made by the /iJ, not by the yamAna यमान, so this rule does not apply.