He is using dominoes to make a floating tenon. The tenon is smaller than the mortise (the hole) and this allows it to move. To keep it from pulling out of the hole, there is a dowel that fits in the wider slot (allowing for expansion). The very center mortise and tenon are sized the same and well attached but the rest of the joints allow for plenty of movement.
|Waxing the end so it won't soak up glue|
Routing the finger pull