My best theory is that each one reacts to a different radio frequency.

I was considering other options. They could possibly have them pre-synced individually before the show and they would flash a predefined pattern. The problem here is you would have to keep the show going at the rate determined by the pre-defined pattern.

They could react to the sound. I don't think this would result in the very well defined pattern that you see. At times, different bracelets go off at different times. So it couldn't be strictly dependent on noise.

They could have some sort of wifi device that tells them what the pattern is or syncs them quickly before the song starts. This seems expensive and it doesn't look like there is enough power or size to have a device like this on the bracelet.

So that's where my best guess of a simple circuit that illuminates when a particular radio frequency goes through the air. That would be cheap, you could have different bracelets react to different frequencies and you could move the show at any pace you wanted to.

If anyone knows the details or has a better theory please contribute.