The only difference is that bounding boxes are still used for sprites, but he adds a sort of voxel heightmap inside of it to represent occupied volume.

> heightmap: https://youtu.be/Ssrkq6_6JYU?t=15m21s

If you imagine this heightmap as a building with multiple floors (e.g. 1st floor, 2nd floor) the algorithm takes the lowest common floor of each of these buildings and performs an intersection test between them and nothing else. This allows the sprites to interact more fluidly inside the bounding boxes! Neat.

> heightmap floors: https://youtu.be/Ssrkq6_6JYU?t=16m12s