For an argument that the iterative conception implies something weaker than unrestricted Separation (implied by unrestricted Replacement), i.e. $\Sigma_2$ Replacement, see Randall Holmes 2001 http://math.boisestate.edu/~holmes/holmes/sigma1slides.ps. (According to Professor Holmes, “this contain[s] an error, which Kanamori pointed out to me and which I know how to fix.”)
Flash Sheridan
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