How does this test flight escape aparatus work?
Qualification: I am an FAA master parachute rigger and taught sport skydiving for 10 years.

Most of the comments on the question are correct - the red slide will extend below the airplane and act as a wind buffer so you can clear the fuselage before the wind blast hits you. The yellow part is a cap that would be removed.

No one would clip a static line to the plane in an evacuation - you want to be well clear of the airplane before opening your own chute. The blue packs are the real thing, I've packed plenty of them. There's a 26-foot round parachute inside. Rough landing but usable by anyone with very little training.

How usable this contraption would be is a different question - skydiving is done at about 100 knots, well below the speed of jets. And it also requires a stable aircraft - if that plane loses it's tail and starts to spin no one will be using the escape slide simply because it will be impossible to reach it. The "bail out in the event of emergency" concept is a bit flawed - if the airplane is flying well enough to bail out then you don't need to. There's a very good reason the military spends a fortune on ejection seats.

Side note - the Space Shuttle had a crew escape process, but NASA considered landing a shuttle on anything other than a proper runway to be non-survivable.