How can wood be bent this way?
Wood can be plasticized by various methods ...

http://www.fpl.fs.fed.us/documnts/fplgtr/fplgtr190/chapter_19.pdf 

"Wood members can be readily molded or shaped after immersion in liquid ammonia or treatment under pressure with ammonia in the gas phase. As the ammonia evaporates, the lignin resets, the wood stiffens and retains its new shape. Plasticization of the lignin matrix alone can be done using chemical modification technologies, which are covered later in this chapter."

http://www.google.com/search?q=wood+plasticizing+wood 

However, in this video interview of Gustav Reyes published about a year ago, he states (at 1:50 min) that he makes his wood jewelry using steam and compression.  

http://www.youtube.com/watch?v=oq-zsyL3vZ8

However, he goes on to claim that the process was created 10-15 years ago. 

Bending any wood, steamed wood included, puts compression on the fibers along the inner radius, and tension on the fibers along the outer radius.  The tension acts to splinter the outer fibers.  The compression acts to buckle the inner fibers.  The solution, long known, is to apply a metal compression band  while the wood is still straight before bending.  The strap is placed on the surface that will form the outer radius.  The strap greatly reduces the tension (splintering) of the fibers on the outer radius, which is good.  But in doing so, it also increases the compression on the fibers along the inner radius, which can be problematic.

If the technique he uses is indeed 10-15 years old, then it is not mere steam+compression and he's told only part of the story.  Plasticizing, as detail in the above PDF, is also and old technique, as is PEG impregnation. So the jury is out.