Gitto - I take your point about the first 2 letters but when offered 2 options the straight line assumption seems a fair one. Indeed there is nothing to in the instruction to say the letters need to be contiguous. In theory you could select the correct number of letters from all over the grid as long as they spell the correct words - but that would be silly.
On reflection I am more worried that the letters do not really describe what happens in the grid. I was wondering If I should write some letters upside down when I realised that the finished puzzle to be submitted Is still a conventional rectangle.