When you divide something by 3/4, there's no way something can decrease, unless the number is a fraction below 3/4.
Since in Step 2, they divided 27 by 3/4, but ended up with 20 1/4, that means that they got step 2 wrong, because 27 / (3/4) is equal to 27 * 4/3 = 36
(This is because dividing by a fraction is the same thing as multiplying by the reciprocal of the fraction.)
So therefore they got Step 2 wrong.