When the affix khañ is added and when aṇ is added then 1. yuṣmāka and 2. asmāka are the substitutes of yuṣmad and asmad,
The pronoun तस्मिन् refers to the visible affix खञ्, and not to the understood affix छ which was drawn into the last sutra by the word च ॥
Why does the rule of mutual correspondence 1.3.10 not apply here, there being two affixes, two words, and two substitutes? This, however, is not done, because the sutra can be divided into two separate aphorisms : as (1) तस्मिन् खञि युष्मदस्मदोर्युष्माकास्माकौ भवतः (ऽ) ततोऽणि च ॥ i.e. (1). when खञ् is added, युष्माक and अस्माक are the substitutes of युष्मद् and अस्मद् respectively (2). So also when अण् follows.
As for illustrations, see the preceding Sutra, e.g. यौष्माकीणः, आस्माकीनः with खञ्, and यौष्माकः and आस्माकः with अण् ॥ This substitution does not take place when छ is added, as युष्मदीयः and अस्मदीयः ॥,