It's gotta be a typo. Front wheel drive gives you the opposite of a lot of space in the wheel wells.
Given that, this whole thing doesn't make any sense to me as a supposed advance. RWD cars have always had tighter turning raidii. Many of them actually have a stop to keep you from turning the wheel 90 degrees such that the tires push instead of roll. I remember adjusting an early 70s Volvo so the front wheel could turn almost 90 degrees just as an experiment, and doing this adjustment was trivial.
RWD car is essentially pushing on a wheel that is almost perpendicular -- not very helpful, a lot of force needed to start the car rolling, potential to damage the wheel. As you get closer to 90 degrees the force needed becomes higher than available traction and the entire thing stops steering at all.
FWD can be thought as "pulling" the car by the front of it, the wheels can be in any position as long as we know how to transfer power.
Most RWD cars mount their engines longitudinally, so the transmission sticks out the back of the engine. This means there isn't a whole lot of "stuff" sticking out to the left and right of the engine. That means more room for wheel articulation.
One problem with FWD is space. Since the engine is usually mounted transversely, the transmission has to go under/beside the engine, taking up space that would otherwise be usable for larger suspension components / wheel articulation.
The other problem with FWD is, as you mention, power transfer. It would be extremely difficult to design a shaft that could transfer power to a wheel that articulates up to 80 degrees. Keep in mind that such a shaft must snake its way through suspension components, too.
If I understand it properly, the demo is using torque-vectoring-by-brake during turns (basically braking the inside drive wheel). Most modern cars can do this, it's just not typically necessary for low-speed turns.
I suspect that the BMW i3 was featured in the video for a lot of reasons:
1) It's RWD, which leaves room for extreme wheel articulation.
2) It's electric, so there's less stuff up front in the first place.
3) The i3's tires are super skinny, meaning less resistance on those super tight turns.
4) The i3's short wheelbase means the outside rear wheel doesn't scrub too badly during tight turns.
Of course, the other posters are right about there being way more space up front in RWD.
Btw, you can achieve the maneuver at 1:20 on FWD by dropping the clutch with the front wheels turned all the way even in conventional range. This slides the car into position at extreme angles. Of course, I don't recommend it due to the wear and tear on the tires, suspension, components, clutch, and the possibility that you don't actually slip the tires and back up into the car behind you, but it is doable, especially in rain / snow.