In the first two sections, we don’t mentally say “breathe in, breathe out”, but we do observe it happening. The only mental note is of the counting. We also don’t try altering the depth or rhythm of the breath, but allow it to be natural.
While the breathing is the same, in the second section we re-order the way we choose to observe the sequence of breaths.
By the time we reach the third section, we should be able to keep our focus maintained for longer without the aid of counting.
If breathing is through the mouth rather than the nose, then the focus for the fourth section (where the breath first touches) will probably be somewhere on the lip.
During all four sections, rather than building a mental commentary try just observing what is happening. If thoughts, sensations or images come up, acknowledge them, then allow them gently to leave, and return to the observations.