A 63-year-old postmenopausal woman presents with a 4-year history of progressive hairline recession. On examination, the structure marked **A** shows a distinct band of pale, smooth, atrophic skin with a characteristic colour contrast against the photodamaged forehead below. Isolated terminal hairs persist along the new margin. A 4-mm punch biopsy from the active margin confirms perifollicular lymphocytic infiltrate, lamellar perifollicular fibrosis, and reduced sebaceous glands. Which of the following best describes the pathological process occurring within the structure marked **A**?