I think that's a really interesting theory. If she wants the dogs head up, she wouldn't correct down. The fact she's popping upwards to me is correcting the dog. She's nagging the dog to keep his head up. I don't see the point at all.
But she's not. Popping or correcting.
To me, the 'heeling and head up' is being done 100% with her hand position and past training with the pup.
To me, what you are seeing with the leash/collar is an entirely different part of the training. NOT being used to have the pup heel or keep it's head up.
I think the handler is trying to get the pup used to the feel of the leash/collar and connect any tension/movement (popping) as a POSITIVE and fun thing. So having the leash on, collar on, handler using her hand on it, is just more of the crazy wonderful happy world of training with my handler.
So later, when training is more difficult (serious) and the handler is no longer able to talk all the time, and use so many tons of constant treats and ONLY has the collar/leash to rely on, the dog will not avoid or shut down or SLOW down because training isn't fun any more.
I know I had a trainer a few years ago who wanted us to do this with the prong collar. She literally had us sit our dogs in front of us with a prong collar on and leash connected. Then hold the leash straight up and give gentle upward pops with the leash and CLICKING/treating each time. The ONLY thing we were training (though we were getting great attention and head up from the dog) was the connection being 100% positive with a leash pop. We just stood in front of our dogs and popped (really gentle, in no way a correction but it would close the prongs a bit) click/treat, pop/click/treat, pop/click/treat.