
The answer is Bob can compute this because Bob knows r. Bob selected r.

Bob has received these two and the value of k1 is equal to r

because that was the one that Bob sent back here.

That means Bob can compute these

subtracting r from W1 prime will give Bob that correct value of wire.

Bob cannot compute W0 though

because the value used for k0 is meaningless and unknown to Bob.

This provides the property that we were looking for that

Bob can select one of the two values that are the wire labels Alice generated.

Alice doesn't learn which one he selected and Bob doesn't learn anything about the other one.