The scheme is the classic phenolphthalein synthesis and its colour behaviour. In moderately basic solution, the dianion has an extended quinonoid chromophore and is pink. In strongly alkaline solution (excess NaOH), a hydroxide adds across the central carbon, breaking the quinonoid conjugation. The resulting carbinol species (compound X) is colourless.

This is why phenolphthalein, used as an acid-base indicator, fades back to colourless above approximately pH 13.