By , , we have a natural bijection
\[ \mathsf{Sets}_{*}\webleft (X\wedge Y,Z\webright ) \cong \textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright ), \]
where $\textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )$ is the set
\[ \textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )\mathrel {\smash {\overset {\mathclap {\scriptscriptstyle \text{def}}}=}}\webleft\{ f\in \textup{Hom}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )\ \middle |\ \begin{aligned} & \text{for each $x,y\in X$, if}\\ & \text{$\webleft (x,y\webright )\sim _{R}\webleft (x',y'\webright )$, then}\\ & \text{$f\webleft (x,y\webright )=f\webleft (x',y'\webright )$}\end{aligned} \webright\} . \]
However, the condition $\webleft (x,y\webright )\sim _{R}\webleft (x',y'\webright )$ only holds when:
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We have $x=x'$ and $y=y'$.
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The following conditions are satisfied:
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We have $x=x_{0}$ or $y=y_{0}$.
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We have $x'=x_{0}$ or $y'=y_{0}$.
So, given $f\in \textup{Hom}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )$ with a corresponding $\overline{f}\colon X\wedge Y\to Z$, the latter case above implies
\begin{align*} f\webleft (x_{0},y\webright ) & = f\webleft (x,y_{0}\webright )\\ & = f\webleft (x_{0},y_{0}\webright ), \end{align*}
and since $\overline{f}\colon X\wedge Y\to Z$ is a pointed map, we have
\begin{align*} f\webleft (x_{0},y_{0}\webright ) & = \overline{f}\webleft (x_{0},y_{0}\webright )\\ & = z_{0}. \end{align*}
Thus the elements $f$ in $\textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )$ are precisely those functions $f\colon X\times Y\to Z$ satisfying the equalities
\begin{align*} f\webleft (x_{0},y\webright ) & = z_{0},\\ f\webleft (x,y_{0}\webright ) & = z_{0} \end{align*}
for each $x\in X$ and each $y\in Y$, giving an equality
\[ \textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright )=\textup{Hom}^{\otimes }_{\mathsf{Sets}_{*}}\webleft (X\times Y,Z\webright ) \]
of sets, which when composed with our earlier isomorphism
\[ \mathsf{Sets}_{*}\webleft (X\wedge Y,Z\webright ) \cong \textup{Hom}^{R}_{\mathsf{Sets}}\webleft (X\times Y,Z\webright ), \]
gives our desired natural bijection, finishing the proof.