Yes I have heard of this technique before. Kind of funny I guess since I don't think the vibrato does anything but maybe in the mind of the performer. I read once that Liszt advocated this technique. My piano teacher also told me to give it a try when I was younger.
If it does anything, it forces the performer to hold down the note for its full duration and to imagine what it might sound like if you could craft such vibrato. Thus causing the performer to shape his/her phrases accordingly.
It is also a common technique on the clavichord; the clavichord can produce a nice vibrato this way. I personally think this technique is more common with baroque or renaissance music but I could be wrong.
In terms of tension problems, to be honest I think it forces you to lift your wrists in a way so they produce less tension -- even if it really is a wasted effort -- but I don’t really know much about this type of thing…
As far a technique goes, he did one thing that baffles me. He sometimes shook his finger when he pressed down on certain keys. Almost like he was trying to coax some vibrato out of the piano. Now, we all know that isn’t possible. Once the hammer strikes the strings - that’s it. Nothing more can be done to affect the sound. Also, it seems to me that this wastes some energy and could also lead to tension problems. Unless - and this just hit me – this is how he prevents tension. Hmmm….I dunno, maybe I’m wrong about all this. Or maybe it’s just something he does instinctively. Again, if anyone has any other ideas about this, please chime in.
One more thing – he wore a black suit, including a black vest, white shirt, and red tie.