"untagged by the switch" refers to the traffic that "crosses a trunk link". And the only traffic that crosses a trunk link remaining UNTAGGED is NATIVE VLAN traffic:
Ref: VLAN Configuration Guide, Cisco IOS Release 15.2(7)Ex (Catalyst 1000 Switches) - Configuring VLAN Trunks [Support] - Cisco
"...
Configuring the Native VLAN for Untagged Traffic
...
Procedure
(steps 1 through 5)
enable
configure terminal
interface gigabitethernet 1/0/2 (or interface fastethernet 1/0/2)
switchport trunk native vlan 12
end
..."
D
The switchport trunk native vlan command specifies the native (untagged) VLAN for a Layer 2 interface operating in trunk mode on a Cisco IOS device. This command only takes effect for interfaces that are operating in trunk mode.
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