1) He defined each mental states one by one as they occurred.
2) He was aware of the mental states arising, their presence, and their disappearance.
3) He understood thus, "So indeed, these states, not having been, come into being; having been, they vanish. There is an escape beyond, and with the cultivation of that [attainment]." He confirmed that there is.
That's a lot of mind movements (thinking) for a person in a jhana! And, he did so for all four jhanas, and also for the first three immaterial attainments.
Evidence that this Sutta is later added:
1) Only available in Pali Canon. No parallel versions in Chinese Agamas.
2) Added extra factors after the standard jhana factors without the Pali conjunction 'ca' (and):
phasso vedanā saññā cetanā cittaṃ chando adhimokkho vīriyaṃ sati upekkhā manasikāro.
3) Addition of upekkhā as an extra factor to all four jhanas (twice in the fourth). In other Suttas, upekkhā only mentioned for the fourth jhana.
4) The factor 'adhimokkho' (decision) never appear anywhere in first four Nikayas. It's an Abhidhamma term that only appears in Paṭisambhidāmaggapāḷi & Abhidhammapiṭaka.
5) The Commentary gives the name anupadadhammavipassana to Ven. Sariputta's method, which played a big role especially in later dry Vipassana circles. One example is Mahasi Sayadaw's meditation manual.
Later in the Sutta, for the fourth immaterial attainment, it says, "He emerged mindful from that attainment. Having done so, he contemplated the states that had passed, ceased, and changed," which is the correct way of insight for any jhana since no contemplation is possible in a jhana (see DN 2 & AN 3.101).
EDIT: 2017 April 07
The below quote is from pg. 121 of Early Buddhist Meditation Studies by Ven. Anālayo
To cultivate such awareness of these mental qualities arising and disappearing while being in an absorption is impossible, because the very presence of these qualities is required for there to be an absorption in the first place and for it to continue being a state of absorption.24
24 This has in fact already been pointed out by Vetter 1988: 69: “it is certainly not possible to observe, as is stated in the text, the disappearance of these qualities in any of these states [i.e., the absorptions], because they are constituted by these qualities.”