I just saw an article about a few people who have been tinkering with it and it was fascinating how this device works. I haven’t found a good explanation, but best I can tell is this:
Imagine if I held two laser points side-by-side in my hands and I pointed them across the room, but instead of the beams behing parallel I angle them slightly apart.
Now if you put your hand near the laser points, you’ll see two red dots about an inch apart. As you pull your hand back the dots will get further apart. This is the key part (as far as I can tell) about how it works. It projects a whole infrared dot pattern onto your body, and another infrared camera watches this dot pattern. Based on the spacing of the dots on various parts of your body it can tell how close that part of your body is to the camera–and likewise it can pick you out of the background of the room because your whole body is closer than the stuff behind you.
There are a series of videos in the article linked to above that show the camera in action, but even in the picture right here you can see his hand (which is closer to the camera) is lighter red. Here is a video of the camera in action:
And the invisible infrared matrix being projected in the room: