1. Except for using oil pressure to release the lock-pins, these appear to be solid lifters, not hydraulic. There's no mechanism for hydraulic pressure to take up clearance from wear. At least, that's how your link describes them.
2. Either he'd beating on the lifter body, which doesn't bode well for the lifter roller, roller axle, or cam lobe; or he's beating on the lifter plunger which doesn't make sense since it's already in the collapsed position--and which doesn't bode well for the roller, roller axle, or cam lobe. Genius solution? Seems barbaric to me.
3. If the lifters get "stuck" from "wear", I'd think that the real solution is to replace them with lifters that aren't worn.
Is there something I don't understand?
1) They are hydraulic roller lifters, not solid. If they were solid this would not be an issue. Chevrolet engines used hydrualic lifters in 1955, and they started using the Roller hydraulic lifters in 1987. Solid lifters require adjustment about every 10,000 miles, thus the beauty of hydraulic lifters, no need to adjust the lash on them...
2) beating on the lifter is to release it, the second video I just posted yesterday he talks about how the lifter collapses and mushrooms then ends up getting stuck. Once you release it, you need to reprogram your ECM so that they no longer collapse. You also modify the pieces in the engine so that it longer activates as he shows in the videos.
3) Absolutely it is better to replace the lifter, BUT investing $500 and driving the car for another 100K vs $2500 for a vehicle that is barely worth $3000 does not sound like a good idea, especially when this fix will be forever, and never have to worry about this happening again.
I would say, yes, you do not understand what he is doing...
I did this very process on my 2006 and it worked like a champ, I drove it for thousands of miles afterwards and never had an issue.
I have a friend who is a full time mechanic, and I showed him this video and he was so grateful because it would save him a lot of time fixing this common issue and it would save his customers money.