This paper investigates noncoherent detection in a two-way relay channel operated with physical layer network coding (PNC), assuming FSK modulation and short-packet transmissions. For noncoherent detection, the detector has access to the magnitude but not the phase of the received signal. For conventional communication in which a receiver receives the signal from a transmitter only, the phase does not affect the magnitude, hence the performance of the noncoherent detector is independent of the phase. PNC, however, is a multiuser system in which a receiver receives signals from multiple transmitters simultaneously. The relative phase of the signals from different transmitters affects the received signal magnitude through constructive-destructive interference. In particular, for good performance, the noncoherent detector in PNC must take into account the influence of the relative phase on the signal magnitude. Building on this observation, this paper delves into the fundamentals of PNC noncoherent detector design. To avoid excessive overhead, we do away from preambles. We show how the relative phase can be deduced directly from the magnitudes of the received data symbols. Numerical results show that our detector performs nearly as well as a fictitious optimal detector that has perfect knowledge of the channel gains and relative phase.