Leinster (p.148) gives the following proof of the fact that representatives preserve limits:
I understand the argument, but why does this prove the claim? To prove that limits are preserved, one has to prove that if $(p_i:B\to D(i))_{i\in I}$ is a limit cone on $D$ in $\mathscr A$, then $(\mathscr A(A,p_i):\mathscr A(A,B)\to \mathscr A (A,D(i)))_{i\in I}$ is a limit cone on $\mathscr A(A,D(-))$ in $\text{Set}$ (Definition 5.3.1). How exactly does it follow from the given sequence of isomorphisms?


Leinster's being slick here, which as you are experiencing is not very satisfying. This is actually an interesting result. To see what he's saying it might help to look at a direct proof which I'll outline.
Let $F: J \to \mathcal{C}$ be a diagram with a limiting object $\text{Lim } F$ equipped with the morphisms $\sigma_i: \text{Lim } F \to F_i$. Then applying the $\text{Hom}_{\mathcal{C}}(C, -)$ functor to $\text{Lim } F$ and to each $u_i$, we realize it forms a cone in $\textbf{Set}$.
Now we show that $\text{Hom}_{\mathcal{C}}(C, \text{Lim } F)$, equipped with the morphisms
$\sigma_{i*}$, is a universal cone; that is, it is a limit.
Suppose that $X$ is a set which forms a cone with the
morphisms $\tau_i: X \to \text{Hom}_{\mathcal{C}}(C, F_i)$.
Then for each $x \in X$,
we see that $\tau_i(x) : C \to F_i$.
The diagram above tells us that $u \circ \tau_i(x) = \tau_j(x)$ for each $x$.
Hence each $x \in X$ induces a
cone with apex $C$ with morphisms $\tau_i(x): C \to F_i$.
(This is like the first isomorphism Leinster uses, because note that you could go from the third diagram to the second, just as we went from the second to the third right now).
However, $\text{Lim } F$ is the limit of $F: J \to \mathcal{C}$. Therefore, there
exists a unique arrow $h_x: C \to \text{Lim } F$ such that
$h_x \circ \sigma_i = \tau_i(x)$. Now we can uniquely
define a function $h: X \to \text{Hom}_{\mathcal{C}}(C, \text{Lim } F)$ where
$h(x) = h_x: C \to \text{Lim } F$, in such a way that the diagram below commutes.
So we see that the Hom functor does in fact preserve limits. The second isomorphism that Leinster is just him reinterpreting what a cone really means in this situation. But when Leinster wraps it up in that esoteric notation it's of course not clear, so diagrams help more with this stuff than notation.