Once in this mode simply click on an element to turn it into a fragment. Click it again to undo. In the screenshot below all three blocks have been made into fragments. The order these fragments will appear in is indicated by the index on top of the element.
Hovering over a fragment reveals controls that can be used to adjust the order. If you give two fragments the same index, they will appear at the same time.
By default, fragments will fade in when stepped through. This behavior can be changed by clicking the three dot symbol next to the index. Learn more about fragment styles.