[Hanschri]

If you watch about 20 seconds of the linked video, it shows the system as a screenshot and in practice for a few seconds. [0]

I would postulate that the loop starts by selecting the yellow block and waiting for him to select or reject it. If he selects it, he is able to cycle through the letters from left to right, ending at the symbol all the way to the right on every layer to exit that block. Then it keeps cycling down until he selects a new colored block. You can see this in practice if you rewatch the bit where he asks his son if he wants to watch a movie with him.

The article also notes that the man gave feedback to improve the system, so I would guess that it's a mix between a limitation of the way this system is set up, how fast the system can accurately distinguish a yes from a no, and how fast he is able to keep up, and for how long.

It would be interesting to see this system be implemented in a better way, I'm sure you could speed this up by dynamically changing the letter layout or even suggesting words on the fly, in the same way spelling suggestions work on other devices.

[0] https://www.youtube.com/watch?v=et22mZ_Ovo0&t=199s