Blending images together to form a single exposure
'Not sure if it works well if the camera is not fixed in one
  position.'


Correct. If you're doing time-lapse you need to have the camera stabilised somehow, or it's going to look wobbly AF. If the camera is moving in real time, then when you speed it up it will be moving 30 times as fast, so something that might look like a slow pan turns into a whip pan.

If you average out 30 frames then you're going to see partial exposures of everything in those frames, which means if something is moving rapidly you'll get a semi transparent 'ghost' of it - the less frames it is in, the more transparent it will appear.

The reason that video works well is that they're using an electronic gimbal to stabilise the camera—that's what they're showing off. Even though the frame is constantly moving there's enough that is consistent across the whole second to achieve a sharp frame, and the camera motion is stable enough that when it's sped up it's still fluid.