"my question is. when executing fase 1-4. can i still work with the 8051"

No. The MCU is busy preparing to handle the interrupt during Phase 1-4 and I dont know what you mean by "can I still work with 8051 ". You already are working!

"or it stops doing whatever it was doing, and loose those precious and critical 9.25us."

Of course it STOPS whatever it was doing (mainline process )prior to entering phase 1. If you mean that your mainline process is going to be halted by 9.25us - the answer is yes.

I am not sure what you wanted was answered. Better read the Bible link given already.

Raghu