Never watched a TTYD run before, but it sounds interesting.
How hard is the skip to pull off? How much time does it save?
I'll copy-paste an explanation I wrote on Reddit, with some minor modifications:
Malleo is a well known TASer in the Paper Mario community, and is part of the team responsible for breakthroughs in TTYD speedrunning, including important glitches like Ultra Hammer Early and Teleporter Room early, both of which have contributed heavily to shaving down the RTA any% record from 5 hours to around 4:15 over the course of the last year. Malleo explains
how to do Palace Skip here, and also explained the significance of Palace Skip
in this video from a few months back.
Palace Skip is a sequence break that has been theorized since... basically the beginning of TTYD speedrunning. It skips a significant portion of the game and also makes other items skippable. It's done in Chapter 8 before the Gloomtail room, and involves clipping through the back wall and hitting the loading zone of the final key room - this directly skips the Riddle Tower and most of Chapter 8, which are areas at the end of the game, and *also* eliminates the need to get the Ultra Boots as well as Boat Mode, meaning Chapters 4, 5, and 6 are all unnecessary. Overall this cuts anywhere from 90 minutes to 2 hours from the run, which is currently a little over 4 hours long at the moment - so finding Palace Skip is a
massive breakthrough.
As for the execution, it seems he's using two recently discovered glitches: Double Text Storage and Yoshi Teleporting. Essentially, Text Storage lets him keep a text box open as he enters battle with an Ember in the room. The text box allows for Yoshi Teleporting to happen, which lets him clip below the room, land on a spring at the bottom, and ultimately end up on the seam of the room. By storing *two* text boxes, he can Yoshi Teleport again once in the horizontal middle of the room and then hover a little to get first strike on the Ember. After running from this battle he performs Double Jump, which... somehow lets him land on the loading zone in the center of the room. I don't really get how this part works, but I don't think anyone does at this point. This lets him access the final key room, and the skip is done.
Here's the problem: this current strategy isn't RTA viable whatsoever. The room contains two Embers and we
need one of them to drop an item, which is RNG, though there is a save block right outside so we can repeat this as much as we want. Both text-storages require frame-perfect inputs, but there isn't a huge penalty for failing these. There's a fight he needs to get into by using Koops when he's all the way on the left side of the room to set up the first Yoshi Teleport, but he can't see where Koops or the Ember are while he's over there, so it's total luck whether he manages to release Koops at the correct position. Finally, if he manages to get onto the seam of the room, he still has to manipulate the Ember into the correct position, Yoshi Teleport "under" it, hover to get first strike on it, run from the encounter, then perform Double Jump (another frame-perfect input) immediately after escaping.
At the moment it's arguably
possible to do RTA but it's probably not worth attempting. Still, just knowing
how to execute Palace Skip is extremely promising for future RTA runs.
TL;DR - it is currently nigh-impossible for a human to pull off, but an RTA-viable version of Palace Skip would cut the run's time almost by half