I was surprised by that too, but then later in the video it shows the other arm that was being controlled by a human hand. It appears to mirror that arms movement, which is why it looked so human.
My take on it, which might be wrong, was that the units can learn repetitive motion from another tracking bulb (in which case, it was learning from the girl playing the musical toy, copying her motions).
No, they use zero electronics it's a pure analog system for now.