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You mean noise-cancelling. That's when the headphone produces a counter audio wave to cancel out unwanted ambient sounds. This audio is not the same as the audio that was picked up by the mic bu it consists of a wave that's the exact opposite.
That's not what happen's here: this is just the same audio, replayed with a little delay. The sound waves aren't cancelled out, instead the brain of the speaker gets fooled which eventually convinces him to stop talking.