Very cool.
There are (or maybe were; I haven't been there for some time) similar demos at the Exploratorium in San Francisco. These are all based on the fact that in most images, the color is a relatively small amount of information. And, even when you have only partial color information, your brain can fill in a lot of it.
This principle is used in the now-obsolete analog color TV system. In the early days of the development of color TV, it was feared that the allocated bandwidth for monochrome TV would not accommodate color, because you had to transmit all three primary colors. It turned out, however, that that was not necessary; you could transmit the monochrome signal and add a minimal amount of color, and it looked like full color to the viewer.
One consequence of this is human "color constancy": the ability to see colors correctly even if the colors in the illuminating source vary a lot. There are all kinds of demonstrations you can do to show that humans see the right color even if the illuminating source is adjusted so that they shouldn't. It's more than just the amount of red, green and blue light in a scene. Your brain can adjust for this.
After all that, this is a very cool demo. Thanks for posting it.