Yes it retains the water as the clothes are spinning around 100 rpm, but it does this while filling for long enough that you can hear rinse water really sloshing hard through the clothes. I almost always use extra rinse (for 3 rinses), and each rinse takes less time off the slow spin as it fills. The first rinse is the longest, followed by the second second being a little shorter, then the third rinse the shortest
Great video example of Whirlpool's trade mark "Catalyst Cleaning". This is exactly what my HE3T does and it is very effective. I don't understand why they stopped this on the later models.
...but the drum in the video looks somehow strange, it's almost like aluminum and not stainless steel. And the array of the holes is uncommon, too, I believe...