"But, the dollars used to fund the non deductible IRA came from a 401k that has zero basis."

You didn't describe this at all. You stated the funds for the 401(k) came as a rollover from a Trad IRA, which itself was a rollover from a 401(k). If all of that is true, then the funds stayed tax sheltered the entire time. The Backdoor Roth had nothing to do with the Employer-related activities. Perhaps you stated it incorrectly, or perhaps what you are thinking of really has no impact on anything.

You never stated he held back some of the funds in between any of the rollover steps. If he did, that would be a Distribution. Once you have these funds in your possession and have paid taxes and any penalties on them, they are just Your Money, at that point. There is no further examination needed for the Source. It's the same as any other money available to you and on hand. Take a vacation. Make an investment.

Next, when you fund your Nondeductible IRA, that's from money on hand. Employment takehome, Car wash, selling drugs, selling eggs, or a prior retirement distribution...Source or why you have these funds on hand, has no bearing on the use of the funds. The use of the funds has no bearing on the source of the funds. It's your money to do with what you want to.

Is there something you need to restate for understanding the path of the Roth Conversion, working backwards step by step, from Roth conversion to Nondeductible IRA to ????