Cross Compiler's T diagram
The T-diagrams (which you had omitted from the original version of your question) are crucial for understanding this sort of question. Let's look at the last T-diagram.



The first T describes a compiler from L to N written in S.

The second T describes a compiler from S to M written in M (or running on M). This will be your compiler compiler.

Applying the second T to the first T compiles the first T so that it runs on machine M. The result is thus a compiler from L to N running on machine M. 

The fact that the second T also runs on machine M is captures that you are running the compiler compiler on the machine which you will run the compiler, rather than having to use a cross compiler (which would be the case if the bottom M were different).