This is like the wierdest drill application I've seen in a while, but
it's pretty obvious if you look at the page. Specifically, the bit
about the floating chuck. The drill bit is is sort of sharpened
triangule (three flutes, three cutting edges), but is allowed to wobble
(float) so that it is not held aligned with the rotation. As it
rotates, one cutting edge bangs into a corner of the metal template,
the other two edges swing around a quarter turn making a cut, until the
next cutting edge bangs into its corner. Just following the cutting
edge is a big lump, that acts as a sort of cam, or lever, so that as
the bit rotates, the bit floats from center and the opposite cutting
edge actually travels in a straight line, rather than an arc. You get
perfectly sharp corners, and can do this with any polygon with 4 sides
or more (each needs a bit with N-1 flutes, and a metal guide piece,
together with the floating chuck).
That's just about the worst explanation ever. You will have to look at
the picture, especially the showing the bit in a square frame.
Rotating chisel is a much better mindset for looking at it.
I wonder if you'd get a good edge if you came up with a mechanical
setup that would move the bit as though it were striking the guide?
Kinda like what drives the beaters in a big industrial mixer. Startup
would be a problem, but there are ways around that....