Where [ɣ] appears between a sonant (voiced consonants like [l], [r] and [ð]) and a vowel, it changed into the vowel [i], as noted by David Salo (GS/§4.152). Probably it passed through [j] (“y”) in the process so that (for example) medial lʒ > ly > li. All the examples we have of this phonetic development are from Noldorin, but we have no reason to believe Sindarin was any different:

• ON. Dirghel > N. Diriel (Ety/DER).
• ᴹ✶stalgondō [> *thalʒon(d)] > N. thalion “hero, dauntless man” (Ety/STÁLAG).
• ᴹ√TÁRAG [> *tarʒass(e)] > N. tarias “stiffness, toughness, difficulty” (Ety/TÁRAG).
• ᴹ√MÁSAG [> *mazgasse > *maðʒass(e)] > N. maðias “softness, pliancy” (EtyAC/MASAG).

The last example was deleted, since it shows a sound change of [zg] > [ðɣ] that Tolkien was unsure of during the Noldorin period of the 1930s (he ultimately adopted this sound change for Sindarin in the 1960s). In terms of the development of [ɣ] > [i], however, it is consistent with the other examples, indicating that this sound change could occur after voiced consonants other than the liquids [l], [r].

There are a few cases, however, where this sound change did not occur:

• ᴹ✶ulgundō > ulund > N. ulun “monster” (Ety/ÚLUG).
• N. thelyn plural of N. thalion “hero, dauntless man” (Ety/STÁLAG).

These examples indicate that before high vowels like [u], [y] (and probably also [i]) the [ɣ] simply vanished instead.

Conceptual Developments: As discussed by Roman Rausch in his Historical Phonology of Goldogrin (HPG/§2.6) and Historical Phonologies of Ilkorin, Telerin and Noldorin around 1923 (HPITN/§4.1.4), there are hints of similar sound changes in the Gnomish of the 1910s and the Early Noldorin of the 1920s:

• G. Losgar = lôs + gar has a variant form Losiar (GL/54).
• G. nosied “kinsman” = nos + ged was revised from nosged (GL/38).
• ᴱN. thalion “warrior, hero” < ᴱ✶stalgond- (PE13/153), with the same etymology in the 1920s as it had in the 1930s.

GS/§4.152 @@@