It's weird that this works. What are they using to prompt you to sign up?

Edit: OK, I just answered my own question. At the top it says:

"You have 2 free member-only stories left this month. Sign up for Medium and get an extra one"

You only get ONE more story to read after signing up? That's very misleading.

Probably cookies and javascript.

Lots of sites would like to make the paywalls immediate, but they won't get ranked highly on search engines if they don't show the article's content to a web crawler.

So the usual approach is to load the content, then hide it as quickly as possible if an unauthorized human is viewing the page.

Exactly, which is why extensions like Bypass Paywalls Clean can easily bypass these paywalls just by changing some Javascript.