The controllers used for this video are probably the index 'knuckles' controllers that have some finger tracking ability. Therefore good replicas of your hand can be generated given the data passed about the location and rotation of the controller and the general position of each finger. Arms are quite a bit harder as the shoulder joint and wrist joint are both muliaxis (while the elbow is fairly fixed). While the location of the shoulder can be inferred based on the location of the visor and the relative location of the controller the full IK chain can solve a number of ways (With your hands on the keyboard notice that you can change the position of your elbow without much effecting your hand or shoulder position.) because of this an improper solve can throw off immersion, better and easier just to have 'phantom hands'.