I listened to your video. The good news is the engine is not seriously damaged.
The pull starter has malfuctioned. It sounds like one or both of the pawls is not retracting from the start reel, as seen in this parts diagram.
http://www.bicycle-engines.com/49cc-engine-parts-diagram.html
Part #48, start reel.
Unfortunately the diagram does not show the actual pull starter assembly.
There are guide channels that are supposed to operate the pawls. Remove the 3 nuts and the black plastic pull starter. There is no need to remove the red fan shroud / magneto cover. Be careful of the 3 metal spacers. They should stay in place inside the fan shroud holes but if they drop out don't loose them.You should be able to see the pawls in the center of the pull starter cover and perhaps what has gone wrong.
The pawls are L shaped metal bars located in the center plastic pawl carrier.
My thought is the large Philips head screw in the center that tensions the pull starter pawl carrier has come loose/ backed off a little and the guide assembly cannot operate correctly.
The center pawl carrier needs to have a little bit of rotational drag to it in order for the guide ramps to operate the pawls.
If the assembly is not repairable, Thatsdax sells a replacement pull starter at a reasonable price.
http://thatsdax.com/ENGINE_KIT_PARTS_PAGE_4.html