Kevin,
You have questioned the operation of a classic CMOS oscillator many times before, so I would like to explain its operation to you:
A) The 2 CMOS inverters have an input threshold voltage of mid-supply. If a CMOS gate is used as an inverter, only one input should be used to keep the threshold at mid-supply. With an input voltage below the threshold, the inverter's output is high. Likewise, with an input voltage above the threshold, the output is low.
B) When you apply power to the circuit, the capacitor is discharged, so has 0V across it. Since the inverters are connected in a circle, they have positive feedback, so that one inverter's output is high and the other's is low, and will remain in whichever state that they power-up in, until the RC network changes it. So if the output of the 2nd inverter is high, then it connects through the discharged cap to make the input of the 1st inverter also high. Therefore the 1st inverter's output is low, which is connected to the 2nd inverter's input, which continues to make its output high.
Here is how they oscillate:
1) Assume that the output of the 2nd inverter is high, as in B above. The capacitor charges through the diode-resistor from the low voltage at the output of the 1st inverter.
2) The voltage at the input of the 1st inverter (which started high) follows the voltage of the charging cap and drops to its threshold voltage.
3) When the threshold voltage is reached at the input of the 1st inverter, it begins to change state, and since it has a lot of gain, its output quickly rises to the threshold voltage of the input of the 2nd inverter.
4) The input voltage of the 2nd inverter started low, but now that the voltage has reached its threshold, then its output begins to drop.
5) The dropping voltage at the output of the 2nd inverter couples through the cap to the input of the 1st inverter.
6) The input voltage of the 1st inverter, which was dropping anyway (#2 above) continues to drop and the high gain positive feedback-connected inverters' outputs "snap" quickly to the opposite state.
7) Now the cap discharges through the other diode-resistor until its voltage reaches the threshold voltage of the input of the 1st inverter, and the positive feedback-connected inverters' outputs "snap" quickly to the opposite state again.
The pot adjusts the charging resistance for the capacitor. The diodes allow the cap to charge/discharge only one way through its part of the pot, so that if the pot is set near one end, then the cap charges quickly and discharges slower, resulting in the inverters' outputs having an adjusted duty-cycle which is called PWM.