I think they've worked out the explanation; it's extremely likely stage magic of the 'grand illusion' type, given the need for Watson to have his view partially blocked. Some way of arresting his fall so he doesn't hit dangerously hard, pressure on the arm to stop the pulse temporarily, a pack of accomplices to run into Watson, block him from the body, and quickly move it. There's some other possible configurations, but that's the most likely, and they certainly hinted hard at it.

My problem is that I severely doubt they will actually deal with any of the logical emotional consequences of this, particularly to John. They've already wildly imbalanced the partnership compared to the original text; Doyle's self-sufficient doctor with an normal social network has become entirely dependent on Sherlock. Sherlock, however, demonstrates via this that he doesn't need John at all; not to help him (he can roust up an entire pack of confederates to orchestrate an illusion at a few hours notice), and not for companionship (at least if they go anywhere near canon, where Sherlock disappears for years to take care of business.)