In 3rd gear

Hydraulic pressure is applied to the 3rd clutch, then the 3rd clutch engages the mainshaft 3rd gear with the mainshaft.
Mainshaft rotation is transmitted from the mainshaft 3rd gear engaged with the 3rd clutch to the countershaft 2nd gear splined with the countershaft.
Power is transmitted from the countershaft to the final drive gear, which in turn drives the final driven gear and the transfer drive gear.
As the final driven gear turns the differential assembly, power is transmitted through the transfer drive gear to the transfer output shaft that drives the transfer hypoid drive gear/shaft and the transfer output shaft (hypoid gear).
Hydraulic pressure is also applied to the 1st clutch, but since the rotation speed of countershaft exceeds that of 1st gear, power output from 1st gear is cut off at the one-way clutch.

Fig 1: D Position And S Position With Automatic Shift Mode - 3rd Gear
Courtesy of AMERICAN HONDA MOTOR CO., INC.