999 B
outwardly
This refers to Jewish rituals which people can see.
merely outward in the flesh
This refers to the physical change to a man's body.
he is a Jew who is one inwardly, and circumcision is that of the heart
These two phrases share similar meanings. The phrase, "he is a Jew who is one inwardly" explains the metaphor "circumcision is that of the heart." (See: rc://en/ta/man/translate/figs-parallelism)
inwardly
This refers to the values and motivations of the person whom God has transformed.
in the spirit
This probably refers to the internal, spiritual part of a person, in contrast to the outward "letter" of the Law. However, it is also possible that it refers to the Holy Spirit (see UDB).
not in the letter
A “letter” is the smallest part of written language. Here it refers to written Scripture. AT: “through the work of the Holy Spirit, not because you know the scriptures” (See: rc://en/ta/man/translate/figs-synecdoche)