Were having fun here...so I'm going to take a stab at how this works....
He plays a MIDI file, it is using guide mode (I think that's what you call it) the T4 is waiting for a key stroke, when he hits a key the next MIDI channel 4 (maybe 1) controls the pitch correction function he added. The lead note sets the pitch for the vocal VH2...processor. It uses the audio from his voice, but, not the main voice, but one of the harmony channels to create the great in pitch sounds...When he moves the slider he is controlling the ratio between the main voice audio on the T4 and the harmony channel.

We'll see how close I am. I could be off as much as my way out of tune singing is!!