> My understanding is this derives from the Latin neuter as well.
Does it? Spanish articles derive from Latin ille / illa / illud ["that", as contrasted with "this"]. The neuter (nominative) form is illud. It is not obvious how this would have resulted in the form lo. Wiktionary suggests ( https://en.wiktionary.org/wiki/lo#Spanish ) that it derives from the masculine form illum, which makes much more phonological sense. (-m was already so weak in Latin that a syllable ending in -m completely disappeared when followed by a vowel.)
The etymology you linked actually says something different:
> From a Vulgar Latin *lo, *illu. Masculine pronoun from Latin illum, singular masculine accusative of ille. Neuter article and pronoun form from Latin illud, neuter of ille.
https://en.wiktionary.org/wiki/lo#Spanish
That means some uses of "lo" are derived from masculine ille while others are indeed from neuter illud. To answer your phonological uncertainty, the entry shows derivation from illud > *illu > lo.
Does it? Spanish articles derive from Latin ille / illa / illud ["that", as contrasted with "this"]. The neuter (nominative) form is illud. It is not obvious how this would have resulted in the form lo. Wiktionary suggests ( https://en.wiktionary.org/wiki/lo#Spanish ) that it derives from the masculine form illum, which makes much more phonological sense. (-m was already so weak in Latin that a syllable ending in -m completely disappeared when followed by a vowel.)