They cut oats, specifically to make steel-cut oats, by chopping the oat groats (the whole oat kernel) into smaller pieces.
The YouTube video excerpt states that oat groats are "chopped up" to create steel-cut oats. This is the key difference in processing that distinguishes steel-cut oats from rolled oats or quick oats, which are steamed and rolled. The steel-cut method simply chops the whole groat.
