Let’s run the cycle again. The piston moves up the cylinder. The top of the piston covers the exhaust port, the bottom uncovers the inlet port. Air-fuel mixture enters and circulates in the sealed crankcase below the piston. The piston rises and compresses the mixture above it.
A spark plug ignites it and it burns. Pressure from the expanding gases pushes the piston down in a power stroke. The top of the piston uncovers the exhaust port and lets exhaust gases escape. The bottom of the piston covers the inlet port and forces air-fuel mixture up into the now open transfer port. The piston reaches bottom dead center, and the crankshaft forces it back up to repeat the process.
Notice which events occur above the piston. Compression of the air-fuel mixture into the combustion chamber. Combustion for the power stroke. And scavenging of the exhaust gases.
Notice the events that occur below the piston. Intake, into the crankcase. Pre - compression of the air-fuel mixture - in the crankcase. And the transfer of mixture from the crankcase, through the transfer port and into the combustion chamber.