Firstly, I think SweetStreams means shrink tubing, not shrink-wrap.
It looks like an appropriate length of elastic is cut, and both ends are put into a short sleeve of shrink tube. In addition a plastic bead is put into the sleeve so that the ends of cut elastic are on each side of the bead. (I expect it is easier to put the bead in from the loop side as opposed to the ?outside?. Then the shrink tube is heated to encase the elastic against the bead. In the process the ragged end of the elastic is singed, making it less easy to remove (or the excess elastic could be cut and the remaining stub singed).