Note: The theorems referenced in the answer are from John Lee's Introduction to Smooth Manifolds (2nd Edition).
First, we note the following fact:
Let $S$ be an embedded submanifold of a manifold $M$. Let $N$ be another manifold and let $\varphi: S\rightarrow N$ be a bijective map that is a "diffeomorphism" in the extended sense (i.e. both $\varphi$ and $\varphi^{-1}$ have local smooth extensions). Then $T = \varphi(S)$ is an embedded submanifold of $N$ and $\varphi: S\rightarrow T$ is a diffeomorphism (with the smooth structure on $T$).
Proof: Extend $\varphi$ to an open neighborhood $U$ of $S$ (and call the extension $\Phi$). Similarly, extend $\varphi^{-1}$ to an open neighborhood $V$ of $T$ (and call the extension $\Psi$). Now using Theorem 5.29, we may regard $S$ as an embedded submanifold of $U$ and thus $\varphi = \Phi|_{S}\in C^{\infty}(S)$ (i.e. it is a smooth map with respect to the smooth structure on $S$). Since $\Psi\circ\varphi = \text{id}_{S}$, using the chain rule we conclude that $\varphi$ is a smooth immersion. Moreover, $\varphi$ is a homeomorphism between $S$ and $T$ and is thus a smooth embedding from $S$ to $N$. The result now follows from Proposition 5.2.
This result helps us to define the necessary diffeomorphisms since it is easier to specify the local smooth extensions on Euclidean space.
Let $C = \{(x, y, z)\in\mathbb{R}^{3}: x^{4}+y^{2}+z^{2}\}$. Then $\phi^{-1}(0, 1)$ is diffeomorphic to $C$ via the map $$(x, y, s, t)\mapsto (x, s, t)$$ whose inverse is given by $$(x, y, z)\mapsto (x, -x^{2}, y, z).$$ Now, to show that $C$ is diffeomorphic to $S^{2}$ consider the map $$(x, y, z)\mapsto \frac{(x, y, z)}{\sqrt{x^{2}+y^{2}+z^{2}}}.$$ To define the inverse map, consider the intersection of the ray $\{\lambda(x, y, z): \lambda > 0\}$ with $C$. Solving for $\lambda$ we get $$\lambda(x, y, z) = \begin{cases}\sqrt{\frac{\sqrt{(y^{2}+z^{2})^{2}+4x^{4}}-(y^{2}+z^{2})}{2x^{4}}}, & x\neq 0\\ \frac{1}{\sqrt{y^{2}+z^{2}}}, & x = 0\end{cases}.$$ To show that $\lambda$ is smooth on $\mathbb{R}^{3}\setminus\{0\}$ consider $f: (\mathbb{R}^{3}\setminus\{0\})\times (0, \infty)\rightarrow \mathbb{R}$ defined by $$f(x, y, z, \lambda) = x^{4}\lambda^{4}+(y^{2}+z^{2})\lambda^{2}-1.$$ Using the inverse function theorem, we conclude that $\lambda(x, y, z)$ is locally smooth and hence smooth on its entire domain. Thus the inverse map may be defined as $$(x, y, z)\mapsto \lambda(x, y, z)(x, y, z).$$