Was doing research into this game for a TAS and so I was looking into the movement tech that the record's description claims to exist. Here's what I found:

Skull kid has no momentum, he moves 11 units in one frame when you start moving, 5.5 units per frame while holding the button down and instantly comes to a stop when the button is released. This means that stutter-stepping like the record does should at best come out even to holding a direction.

Here's a comparison video:

I made all the videos re-sync on elevators, as well as the first table you cut down and the final cutscene at the end of the game. My observations here are as follows:

• the record cuts things down at the same speed as TAS and 2nd place, the elevators and final cutscene also take equally as long

• the record moves significantly faster, being able to outrun TAS in level 1 and catch up in level 2 despite slower fights

The record holder never seems to have answered what's up with the lowered saturation of the game, but I think given the different visuals and difference in movement speed, but not animation speed it's fair to say that the WR video likely wasn't sped up, but rather played on a faster version of the game unintentionally.