xLi₂MnO₃·(1−x)LiMO₂ (LLO)/spinel nanocomposites are of substantial interest as cathodes with high capacity and enhanced conductivity. However, their electrochemical properties are significantly influenced by the complex phase constitutions, and undesired by-products such as rock salt phase could not be efficiently avoided. By ex-/in-situ XRD, we revealed the three phase transitions during the decomposition reaction of spinel phase, namely, Li-rich spinel (S_L) to LLO (L), normal spinel (S_N) to rock salt (R) and rock salt to LLO. Density functional theory calculations suggest that Li migrates from the 8a tetrahedral site to the interstitial 16c octahedral site as oxygen is released from S_L and S_N, forming quasi-Li₂MnO₃ and quasi-rock salt crystals, respectively. The dynamic priority of each reaction determined by experiments and calculations was utilized to design the LLO/spinel composites, and a composite with more spinel phase (7.6%) demonstrated high capacity retention at high rates. Our study sheds light on the mechanism of phase transitions among the spinel-layered-rock salt system and reveal the thermodynamic and dynamic priority of each reaction, facilitating the rational design of LLO/spinel composites.