I was watching the GIF on their facebook post. To me, it looks like the barrel extension idea is correct. You can see what looks like an extended barrel extension in the very front of the ejection port. The upper receiver appears to be otherwise standard (aside from it being a "slick side" without the F/A). The downside to this is that barrels will be proprietary. I read somewhere else it would be compatible with existing flat-faced barrels. I don't see how that could be true.
I am also a fan of CMMG's guard system, if they could get the ejector spring issues sorted out. Someone got a revised design BCG from them not long ago and is testing it. Last I checked, he was only up to 600 rounds or so. He had stated that spring failures weren't happening until around 1000 rounds so he's got a ways to go.
Is he running a lightning link? Is that why he is able to go from semi to full auto by just holding the trigger down? You can see that he does not rotate the selector another 90°.
No matter what, I am impressed and I want one. My direct blow back upper is a load. I have a 4.5" barreled AR in 9mm that weighs as much as some of my guns with 16" barrels because of the added weight of the bolt, buffer, etc. Stupid.