Step 1: Have your seed/mnemonic at hand.
All words of your seed come from the BIP-39 word list. One property of that wordlist is that it is enough to know the first 4 letters of a word to identify it unanimously. That's why you can only punch the first 4 letters of each word on your STEELWALLET.
Step 2: Grab a marker and mark the holes you need to punch.
For example, if your first word is "escape", make a mark where column 1 and row E cross. Continue with the first 4 letters of each word.
Step 3: Check that you've marked all spots correctly
Before you use the automatic puncher you should verify that you've marked all spots correctly.
Step 4: Take the puncher and punch the spots that you've marked.
After having punched the first 6 words, turn the sheet around and punch the next 6 words. Repeat until you've punched your whole seed