The above definition is adapted from the one given by Charles Peirce (CP 4.235, "The Simplest Mathematics" (1902), in Collected Papers, CP 4.227–323).
The way that Charles Peirce describes it, the main thing about the formal operation of hypostatic abstraction, insofar as it can be observed to operate on formal linguistic expressions, is that it converts an adjective or some part of a predicate into an extra subject, upping the arity, also called the adicity, of the main predicate in the process.
For example, a typical case of hypostatic abstraction occurs in the transformation from "honey is sweet" to "honey possesses sweetness", which transformation can be viewed in the following variety of ways:
The grammatical trace of this hypostatic transformation tells of a process that abstracts the adjective "sweet" from the main predicate "is sweet", thus arriving at a new, increased-arity predicate "possesses", and as a by-product of the reaction, as it were, precipitating out the substantive "sweetness" as a new second subject of the new predicate, "possesses".