Sway, a position, is a result of using sideswing, an action. Since the swing is already developing at the end of one, sway will start to enter into the picture before the end of two, so the book says there is sway on two. However the initial swing is more forwrds than sideways, so the sway develops slowly and is more evident on three than it is on two. If you had to pick one aspect to assign to each of the three steps, these would be 1.CBM, 2.swing, 3.sway - with the latter two being only approximations of where they occur.
And I think you could also argue that the sway has been at least partially lost by the end of step 3.