Basically, that position can throw the horse off balance, so they switch gaits (the hands up is because it is easier for the horse to gait in a head up position)... It has been taught to me as a "no no" when actually trying to work on the gait, but it can help assess the gait to see what's "there".
My understanding is a well trained 5 gaited Saddlebred will change gait mostly from the rider's seat... But their "position" shouldn't be quite that dramatic... There is a slight change in how the rider sits though.
My mare has been learning to amble if I sit with my pelvis tilted back a bit, and we encourage it by pushing her walk until she picks up the gait.
Her rack is hideous. I don't work with it at all yet. It tends to come out if I ask for the canter (canter also needs help, we are building strength first at the walk, amble and trot first).
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