“Sati kāyagatā upaṭṭhitā,
Chasu phassāyatanesu saṁvuto;
Satataṁ bhikkhu samāhito,
Jaññā nibbānam attano”ti.
It might be rendered like this:
When recollection is established on the body,
[and] the six domains of stimulation [are] restrained;
a mendicant always composed,
knows extinction for themselves.
Starting from the end: what does it mean to 'know extinction for oneself?' The knowledge involved here is clearly not a theoretical knowledge, but rather the experiential insight (paññā) that constitutes wisdom and leads to freedom. This freedom is commonly understood in the discourses as the extinction (nibbāna) of greed, aversion, and ignorance, the extinction of appropriation, and hence of any sense of making 'mine' or claiming anything for 'me'. This knowledge, this experience, is not something derived or borrowed from any other source, but it is gained directly, 'for oneself' (reading 'attano' as dative). It might be called, an 'intuition'.
What does lead to this result? The preliminary condition is a state of continuous composure (satataṁ ... samāhito). This does not necessarily mean to be permanently locked into a jhāna, but rather to have established a permanent center in one's experience, so that attention steadily gravitates there.
And how does one establish such a centre? The beginning of the stanza suggests two ingredients: sense restraint and recollection of the body. These are actually two sides of the same practice. Sense restraint means that instead of constantly engaging, reacting, and proliferating on the various stimulations that come from the six sense domains (including thoughts), one remains composed, untouched, knowing that no urgent action is required. Sense restraint is not a way of shutting down the senses or living in a sensory-deprivation tank. It is rather a choice of being highly selective concerning which sorts of sensory stimulations require some form of response (some of them do, most of them don't). This is another way of making 'stimulation' (phassa) cease, since when one is less reactive to stimulations, whatever is perceived does not actually elicit (stimulate) a reaction, hence it ceases to be a stimulation.
In order to sustain sense restraint, attention needs to be counterbalanced. There must be some stronger, more powerful weight that helps attention to remain grounded and thus refrain from being dragged here and there by external stimulations. This more powerful weight is the body itself, which by being continuously recollected (Sati ... upaṭṭhitā) keeps grounding and rooting attention. Thorough embodiment leads to freedom.
There is something very simply, and yet almost magic about how the sense of being fully immersed in the body reshapes experience. Body recollection is not a way of obsessively examining bodily sensations, nor a paranoid attitude of always focusing on a particular aspect of the body excluding everything else. It rather consists in a profound, intuitive feeling of being fully in the body, and experiencing the body itself as the overall context in which anything else happens and unfolds. No matter how diverse experiences might be, they all run on top of the same background.
The continuity of this background actually underscores the uncertainty, impermanence, and fleetingness of all the rest that happens. When attention is grounded in the body, thoughts might spin around at some point, but they will be heard as if coming from another room, and perhaps one might just wonder 'why bother?' - and let them fade on their own. In this perspective, this constant manifold stream of contents, voices, and stimulations looses its interest and cogency.
When stimulation (phassa) ceases, craving also ceases, and with it appropriation, existence, self-ing, and suffering. What is left? -- Wrong question! What matters is what is no longer there: the struggle, the fear, the need, the scattering of attention. The rest is just fine.
