It's a fascinating dead end in the history of hypertext. Ted Nelson has always come across to me as either 51% visionary and 49% crackpot, or the other way 'round. Technically, Xanadu's bidirectional links and document transclusion (e.g., not just including links but whole sections of other web pages in yours) are really interesting. From a copyright standpoint, they're kind of a mess, and an integral idea of Xanadu is essentially being able to make links and embedded microdocuments require micropayments for usage and/or inclusion, which sounds like the kind of thing that people who don't like libertarians use to parody libertarian ideas. And, from a practical standpoint, they've just never gone anywhere -- as far as I can tell, in no small part because Mr. Nelson is apparently impossible to work with.
Earlier discussion: https://news.ycombinator.com/item?id=15269827
A famous (and infamous) article, "The Curse of Xanadu", on "the longest-running vaporware project in the history of computing, a 30-year saga of rabid prototyping and heart-slashing despair" (now closer to 50 years and counting): https://www.wired.com/1995/06/xanadu/
I don't think I'd actually clicked through and seen this demo before, though, which adds some interesting new objections to it on my end -- I find the user experience here ugly and cryptic. I'm sure a much nicer one with these ideas could be made, but it seems oddly telling that Xanadu's proponents think this -- and the Xanadu web site in general -- are great ways to sell the ideas.