The construction yields a nondeterministic NFA $A'$ that is equivalent to the original alternating AFA $A$.
The states of the new automaton are sets of states of $A$, just as in the classic construction of a deterministic DFA from an NFA. In the new DFA we collect all reachable states and accept if one of the states in this set is accepting in the original NFA.
Here the situation is dual: we accept in a state $X$ if all states are accepting in the original AFA: $X\subseteq F$, or in other words $X\in 2^F\setminus \{\varnothing\}$.
From a set $X$ we move (nondeterministically) to a new set $X'$. For each $q\in X$ we do the following.
If $q\in Q_\forall$ is universal, then all successor states $\delta(q,a)$ must lead to acceptance, so all of them are part of the new state $\delta(q,a) \subseteq X'$.
If $q\in Q_\exists$ is existential, then at least one of the successor states $\delta(q,a)$ must be accepting, so at least one of those states must be in the new state: $\delta(q,a) \cap X' \neq \varnothing$.
This construction keeps track of the computation tree, but when states occur more than one time in that tree they are collapsed into one.
See this figure from the paper you linked (K. Narayan Kumar, Chennai Mathematical Institute, Notes on Automata, Logic, Games and Algebra, Lecture 6: Alternating Automata):

δ′(X, a) = {X′ ⊆ δ(X, a) | ∀q ∈ X ∩ Q∀. δ(q, a) ⊆ X′ ∧ ∀q ∈ X ∩ Q∃. X′ ∩ δ(q, a) ≠ ∅}
. In this, what isX
andX′
? Is it states? or set of states? $\endgroup$