When the motor is off, the beads simply hang in a loop. However, at speed, the loop acquires weird properties. When it is touched it is possible to change the loop's shape. After a second or so, the shape will return to some default. The apparent mass, elasticity, and viscosity of the loop is significantly different than what is observed when the motor is off.
The real surprise comes when a plate is used to lift the beads off the pulley .. If I wrote it down, you wouldn't believe me. Perhaps if you watch the video.
Video goes here
We have also tried ball chain, linked chain, and string.
At first glance, this looks very dangerous (and perhaps it is). However, we touch the chain with our fingers.
My understanding of the physics (and the related equations) is not good enough to provide a complete explanation. As you can see, this apparatus has a lot in common with a gyroscope (or a top). In all 3 cases, the fact that something is moving changes the apparent properties. In particular, the effective mass (rotational inertia) changes as a function of the speed.
This phenomena also has a lot in common with cowboys spinning a rope (sometimes called a Lariat). In that case, the part in the hand replaces the pulley.
By comparison, our chains are from 1 to 3 feet long - depending on which chain we use. Besides exhibiting standing wave phenomena similar to the larger museum displays, our smaller size make it possible to lift the chain off the pulley - using a plate (loud), a pad of paper (quite), or other objects - which is what most people really like.