The ZIP format supports several variants of password-protection of a file.
The early password protection system in ZIP is known to be seriously flawed. However, later versions of the format provide far better protection, including support for stock encryption algorithms like AES to which no known attacks exist.
The author of the video appears to be using WinRAR. RARLabs, developers of WinRAR, try to promote their proprietary RAR format, and claim that ZIP does not support AES encryption. That's simply misinformation, considering that competing products like 7-zip do support it. I would suspect that they intentionally use a weak implementation of ZIP to make their own format look better in comparison.
But Nullsoft Installation System (NSIS) does not actually seem to contain a cracker for weak ZIP archives. Why should it? It's a sofware for building installers, not a cracking tool.
Notice that the presentator does not try to actually open any of the unpacked files. The directory structure of a ZIP archive isn't encrypted, so it can be read without the password. Working with encrypted archives is quite out of scope for an installer builder, so the developers likely didn't even bother to detect encrypted files. A telltale sign that the unpacked files are in fact just garbage is this screenshot from the unpacked directory at 11:00.
Notice something? Hint:
The only visible file here shows a filesize of 0 bytes. The other unpacked files likely don't look much better.