The details of the glitch are still uncertain, and there are many questions after reviewing the video. Unfortunately, in their haste to have video evidence of the glitch, SLAPAHO quickly ended the match with little experience of the glitch itself so the replay could be saved.
What is known is that it involves Ness being hit by an attack of higher priority while his yo-yo is outstretched. Shortly before impact, Ness must release the yoyo. The animation will be canceled, causing the yo-yo to fail in retraction, effectively leaving the yo-yo limp at Ness' side. The yo-yo appears to retain its charging hitbox, which only hits an opponent or damageable object once, very similar to the function of the SLAPASTICK.
A similar glitch occurs in Melee with Dr. Mario reflecting a Pokéball to Mario, where Mario's cape "breaks" and his cape hangs out the entire time.
How to preform: Little is known about this glitch. First, both a Ness and a Lucario are needed. A flat stage such as Final Destination is best, but any stage can be used. Using Lucario(for some people Samus is easier), get a fully charged aura sphere. Shoot the aura sphere at Ness, then have Ness do his up smash. If done correctly, the aura sphere should pass Ness's Yoyo and hit him, thus canceling the animation of him putting away his Yoyo. The Yo-Yo can deal 4% damage to other opponents.