Definition of 'cut out in'

I was reading 'The Hound of the Baskervilles' for the sake of improving my English and have not found the definition of the phrasal verb in bold:

‘I don’t know much about the tariff and things of that kind,’ said he; ‘but it seems to me we’ve got a bit off the trail so far as that note is concerned.’
‘On the contrary, I think we are particularly hot upon the trail, Sir Henry. Watson here knows more about my methods than you do, but I fear that even he has not quite grasped the significance of this sentence.’
‘No, I confess that I see no connection.’
‘And yet, my dear Watson, there is so very close a connection that the one is extracted out of the other. ‘You,’ ‘your,’ ‘your,’ ‘life,’ ‘reason,’ ‘value,’ ‘keep away,’ ‘from the.’ Don’t you see now whence these words have been taken?’
‘By thunder, you’re right! Well, if that isn’t smart!’ cried Sir Henry.
‘If any possible doubt remained it is settled by the fact that ‘keep away’ and ‘from the’ are cut out in one piece.’

I contextually suggest this phrase means 'concentrated in one place/extract', but what is its dictionary definition? Moreover, is this expression considered old-fashioned or not?

By looking up an online edition of the story I quickly confirmed what I thought must be the explanation.

Sir Henry has received a note made up of words cut from a newspaper (so that the handwriting isn't recognisable). Holmes remembers having seen a recent article with almost all those words in it. The pairs of words keep away and from the are next to one another in the article, so the person who composed the note was able to cut them out of the newspaper in one piece rather than as separate words.