He's using some mod or the console to affect that NPC. Probably by turning gravity off or something.

Not quite. There's a screen capture program called FRAPS, and that 60 in the corner means it's on but not capturing any video. When the number disappears, he's turned on the capture program...and the guard stops flying, like he's being watched. And now I've explained the nerdy layers to this.

It's simple quantum physics.

FRAPS is changing the guard just by observing him.

If this is on FRAPs why the hell is he using a camcorder

The PC only records the screen when FRAPS is on
The guard only levitates when FRAPS is off.
So, to answer your question, it is for DRAMATIC EFFECT.