How do you do this glitch? Is it version exclusive? It seems just like when you enter an area in 1.0 and mash ocarina while swordless, except they do it anywhere. How is it done?
Get on Epona while swordless and use an item that plays a cs.
What's the fastest way to go swordless now? I think I saw someone steal the rod and pause while diving underwater, will that work?
If you steal the rod, you can pause with a dimmed B button to go swordless which works on ladders or in some buildings, too. As long as you haven't equipped a sword, you can use Ingo's horse riding game and exit/savewarp to become swordless. The fastest method should be getting bottle on B with quickdraw and then kill Link.
Doesn't dying with bottle on b give you the deku stick? Does that work too as long as you don't have any deku sticks?
It depends on whether your Sword Flag is cleared or not when you die. There are a lot of different methods so the ZSR site on Swordless Link should help you with that.