Scent is actually not foreign to humans at all, it's a natural physical response for humans as well, but since this is a family friendly forum perhaps it's best not to get into the details.
There are a few issues here that people are disagreeing on. you think it's ok to use a bitch in heat as the reward, some of us don't. I don't have a problem at all with positive training, but I do think it's wrong to expect the female to put up with that behavior. They are very lucky they have such a patient calm female, because not all would put up with that - even in heat. I personally don't agree with using another dog as the reward, regardless of the reasons. The dog responded fine with the ball/tug toy, and was still working great, excited to do the contact exercise again, and then they used the other dog. I really don't see a reward occuring at all. When the dog loses focus, the handler let him run over to the female as an outlet.
The dog certainly isn't going to be able to do this in a show, so I really don't see why they would bother using this as the reward for performance, what do they expect to happen when he's off lead and a dog in heat is around at the show? Without that leash on, it doesn't look like there is a lot of control occuring around that female. You have to start somewhere of course, but this doesn't seem like a situation where the dog is going to improve if they keep allowing him to run over to her. Seems like the point of redirection would be to redirect his focus back on the handler, not keep not allowing him to focus on the female. Even during the contact exercise, they had the female parked in front of him and he could see her and just run straight to her. His focus was not on the handler or exercise. It was on the dog in heat in front of him.