Ok, its late, Im tired, but Ill give it a try
Basically what they trying to say (in a complicated way), needle will move:
A. When pressure is changing. Either by climbing/descending. Or by changes in atmospheric pressure (airplane stands on the ramp, pressure changes, altimeter will show climb/descend.
B. You can adjust altimeter manually, by rotating the knob. Aka ""The other method of moving the pointers does not rely on changing air pressure, but the mechanical construction of the altimeter."
So, that how it fits into the example.
Pressure settings is 30.00
Atmospheric pressure is 30.00
Elevation of airfield is 1000 feet
Altimeter shows 1000 feeet
Then, atmospheric pressure drops down to 29.50.
Your pressure setting is still 30.00 and therfore altimeter shows 1500, aka climb of 500 feet.
Then you go into the airplane and change your pressure settings to 29.50, same as atmospheric pressure, and altimeter is now showing right altitude, 1000 feet.