This was a two-stage 8 way hybrid that was seemingly going well, but it exploded on the second stage just before break-off. Most of the jumpers did a decent job tracking off but when this jumper deployed, they see their buddy plummet past them at a dangerously close proximity. Fortunately, there was no impact, and the jumper was able to fly his canopy away from the other jumper.
The jumper whose POV we're viewing told us that he didn't realize one of the other jumpers had tracked above him. This opens a big can of worms but, ultimately, the lower jumper has the right of way and the individual above him should have altered their track to not be on top of him. Why that didn't happen is conjecture but the most common reason for this type of incident is that the higher jumper was simply not paying attention to what was below him.
Obviously, had the higher jumper paid closer attention to what was occurring below him, they could have just adjusted their vector to get away from the jumper below. Being above someone during breakoff is a bad idea given that - if they deploy suddenly - you could end up eating their canopy and impacting at high speed.
The jumper whose POV we're viewing didn't check their airspace. That's an issue because, while he was able to see where 5 jumpers went after breakoff, there were 2 jumpers whose positions he did not know. This group wasn't THAT big, and everyone was on level at breakoff, so knowing where everyone went shouldn't be that hard.
The reason that we are taught to wave off is so that, should someone accidentally be right above us, they know that we are about to pitch and potentially deploy a canopy into their face. Admittedly, the jumper above them shouldn't be in that space in the first place, but if they see someone waving off, they at least know that they are in a very dangerous spot and can try to either deploy immediately or get the heck away.
If you happen to be in a situation where you’re tracking away from everyone and see that one of your buddies is directly below you – AND you know for a fact where everyone else went/know that there is no way that someone is above you – pitch right then and there! In that situation, deploying immediately – if you’re already at an appropriate altitude and know for a fact that no one is above you – is a safe move that will immediately create vertical separation between you and the jumper beneath you, as well as give them time to continue tracking away from you to create horizontal separation.