When I said "in each iteration" I meant "each time the game chooses a random parent and a random IV." Therefore, each time a random IV and a random parent are chosen (that is, up to 3 times), the Power Bracer, etc. can apply if that parent holds that item. Another example should make this clearer.
Assume once again that the mother holds a Power Bracer and the father holds no item.
Iteration 1. The game chooses a Special Attack IV and the game chooses the father. The baby inherits the father's Special Attack IV.
Iteration 2. The game chooses a Defense IV and the game chooses the mother. The game changes the IV inherited to an Attack IV since the mother holds Power Bracer. The baby inherits the mother's Attack IV.
Iteration 3. The game chooses an Attack IV and the game chooses the father. The baby inherits the father's Attack IV.
Note that again, in the end, the baby inherits the father's Attack IV. Let's change iteration 3:
Iteration 3. Father's Special Defense IV ---> The baby inherits the father's Special Defense IV and retains the mother's Attack IV.
Iteration 3. Mother's Speed IV ---> The baby inherits the mother's Attack IV instead.
Assume once again that the mother holds a Power Bracer and the father holds no item.
Iteration 1. The game chooses a Special Attack IV and the game chooses the father. The baby inherits the father's Special Attack IV.
Iteration 2. The game chooses a Defense IV and the game chooses the mother. The game changes the IV inherited to an Attack IV since the mother holds Power Bracer. The baby inherits the mother's Attack IV.
Iteration 3. The game chooses an Attack IV and the game chooses the father. The baby inherits the father's Attack IV.
Note that again, in the end, the baby inherits the father's Attack IV. Let's change iteration 3:
Iteration 3. Father's Special Defense IV ---> The baby inherits the father's Special Defense IV and retains the mother's Attack IV.
Iteration 3. Mother's Speed IV ---> The baby inherits the mother's Attack IV instead.