Original text:
header field with the 'N' bit set, it MUST use a literal representation to forward this header field.  This bit is intended for protecting header field values that are not to be put at risk by <del> compressing them (see Section 7.1 of RFC7541 for more details). </del>  The fourth ("S") bit indicates whether the reference is to the static <del> or dynamic table.  The 4-bit prefix integer (see Section 5.1 of RFC7541) that follows is used to locate the table entry for the header name.  When S=1, the number represents the static table index; when S=0, the number is the relative index of the entry in the dynamic table. </del>  4.5.5. <del> If the name entry is in the dynamic table with an absolute index greater than or equal to the Base, the representation starts with the '0000' four-bit pattern.  The fifth bit is the 'N' bit as described in literal-name-reference.  Finally, the header field name is represented using the post-base index of that entry (see post-base) encoded as an integer with a 3-bit prefix. </del>  4.5.6. <del> An addition to the header table where both the header field name and the header field value are represented as string literals (see primitives) starts with the '001' three-bit pattern. The fourth bit, 'N', indicates whether an intermediary is permitted to add this header to the dynamic header table on subsequent hops. When the 'N' bit is set, the encoded header MUST always be encoded with a literal representation.  In particular, when a peer sends a header field that it received represented as a literal header field with the 'N' bit set, it MUST use a literal representation to forward this header field.  This bit is intended for protecting header field values that are not to be put at risk by compressing them (see Section 7.1 of RFC7541 for more details). The name is represented as a 4-bit prefix string literal, while the value is represented as an 8-bit prefix string literal. </del>  5.

Reviewer comments:
Use more uniform and more specific language in description of instructions, like "follows" instead of "includes" or implicit mention of a field. Add references to integer and string encodings where missing. Prefer internal references to external ones (also in Section 1.2). Explicitly allow a header block to not have any instructions after the mandatory prefix. Refer to Literal Header Field With Name Reference section in Literal Header Field Without Name Reference instead of verbatim repeating text on 'N' bit. Reshuffle sentences, insert references instead, remove sentences where references suffice.
Mostly good improvements; a few things to fix up further.

Revised text:
header field with the 'N' bit set, it MUST use a literal representation to forward this header field.  This bit is intended for protecting header field values that are not to be put at risk by  <ins> compressing them (see security-considerations for more details). </ins> The fourth ("S") bit indicates whether the reference is to the static  <ins> or dynamic table.  The 4-bit prefix integer (see prefixed-integers) that follows is used to locate the table entry for the header name. When S=1, the number represents the static table index; when S=0, the number is the relative index of the entry in the dynamic table. Only the header field name is taken from the dynamic table entry; the header field value is encoded as an 8-bit prefix string literal (see string-literals). </ins> 4.5.5.  <ins> A literal header field with post-base name reference represents a header field where the name matches the header field name of a dynamic table entry with an absolute index greater than or equal to the Base. This representation starts with the '0000' four-bit pattern.  The fifth bit is the 'N' bit as described in literal-name-reference. This is followed by a post-base index of the dynamic table entry (see post-base) encoded as an integer with a 3-bit prefix (see prefixed- integers). Only the header field name is taken from the dynamic table entry; the header field value is encoded as an 8-bit prefix string literal (see string-literals). </ins> 4.5.6.  <ins> The literal header field without name reference representation encodes a header field name and header field value as string literals. This representation begins with the '001' three-bit pattern.  The fourth bit is the 'N' bit as described in literal-name-reference. The name follows, represented as a 4-bit prefix string literal, then the value, represented as an 8-bit prefix string literal (see string- literals). </ins> 5.