PTM processes may vary by store and by leader. Six(?) weeks before an area is due to reset, the aisle goes MPG (Merchandise Presentation Guide). When the aisle goes MPG, scan all empty locations, and cover or remove the price labels for items that meet all of the following: they are discontinued, have no backroom locations, and have an on-hand count of zero. The resulting holes are then filled with discontinued merchandise that has been pulled from the backroom in a PTM batch. Once all the discontinued merchandise sells down, you fill the holes with carry-forward merchandise. Pre-Transition Merchandise refers to the merchandise that gets pulled from the backroom to be flexed, though it may also refer to the batches that are dropped to pull said merchandise. Any time merchandise is flexed into a hole, the old label should be covered or removed and replaced with a generic label (one that doesn't show a location schematic) for the flexed item.
When you come across discontinued merchandise with no sales floor locations (NOP), ask your leader whether it should be backstocked or flexed. Some leaders prefer that it be backstocked, the idea being that it will be pulled in a PTM batch before it hits clearance. Others want it to be flexed on the sales floor so it has a chance of selling sooner.
The goal of the PTM process is to sell as much discontinued merchandise as possible before it can hit clearance. It's better to sell the items at their regular prices than to have to mark them down.