Usually you'll iterate several times on #1, which is where LLMs are really helpful. They let you get working code from stage #1 quite quickly, so you can check the output and behavior, and then oftentimes you'll find that you framed the problem incorrectly in the first place. Then you can fix your problem definition, have the LLM rewrite the code, try it again, and so on, until you get the results you want.

#1 -> #2 is a gap, but it also helps if you ask the LLM to explain its thinking and generate a human-readable design-doc of the approach it took and code organization it used. Then you read the design doc to gain the context, and pick up with #2.