Does anyone know what they are actually doing here? How much and what kind of information they gather from these tests?

They are determining tempratures for the oil and water in various parts of the engine and making sure that oil pressure is maintained. They also experiment with different size fuel injectors to se how that affects performance and to make sure that fuel is being distributed adequately to all three cylinders. A lean condition in one cylinder would cause the piston and/or valves to melt. After extended testing they'll tear the motor apart and see if there is any unexpected wear. As a benefit of all this testing, they'll also be able to pull horsepower and torque numbers to see if it lives up to the computer estimates. Mostly they just want to make sure everything works. I don't think they will look to change any components in search of additional power unless the numbers are way off.

Also, how do they run a liquid cooled engine without a radiator? Are they running a straight pipe for exhaust? Doesn't the catalytic converter, pipe run and muffler effect compression? You can't see the whole test rig but there is probably a radiator on it with a fan blowing air. I think it's right up front where all those blue hoses are going but don't recognize anything familiar. The tank with brown fluid is the gasoline and I believe the radiator is right under that. But the rig goes farther forward and it may be out of the picture. Yes, the exhaust is a straight pipe and it won't sound as good with a muffler and outside acoustics. No, the muffler etc. don't affect compression and these days they don't have a lot of impact on power either. If you add power at one rpm you take it away somewhere else. The main reason people change mufflers today is for the noise.

Yeah, it sounds really sweet. But I think that's because of the short exhaust pipe and the room acoustics. Building a car around it will add resonances that change the sound.