Did you expect them to have a full-out fight at a public expo? lol Tai Chi responds with only as much speed and power as is used by the opponent. If the guy throwing the punches threw them at full speed and power, he just might have gotten his neck broke when that power was used against him. If anything, IMO the guy in the video was being gentle with the student. I've been put into many of those holds by master practitioners. You can't do a damn thing but fold to the ground once you are in their control, and you don't feel the trap until you are already in it and it's too late. It's stupefying, and pretty embarrassing, dangling and flopping like a fish while a guy half your size holds you there with no effort while he smiles and talks to the onlookers.
I don't recall UFC 1, was it a supposed Tai Chi master against a BJJ artist? I do remember, however, renting like 5 of the first tapes that came out on VHS about 10-15 years ago. Time after time, I slowed the tape down and watched as a "defenseless" opponent lay on his back and received multiple head punches... that all missed the mark. Yet, the ref stopped the "fight".
There was one time where a guy delivered a "knockout" punch (more invisible in slow-mo than the infamous punch Ali threw against Liston) that sent the opponent frozen and motionless but semi-upright against the side of the octagon, like a still figure in a macabre tableau. I have seen hundreds of real knockouts in boxing matches, and have never seen one time where a guy that was unconscious and motionless laid anywhere but flat on the canvas. Too many other similar things for me to ever take this stuff seriously.
I'm not saying that some of these guys don't possess world-class fighting skills, I just don't think they actually use them with real intent in these most of these matches. There'd be a lot more guys leaving on stretchers if they did.