Edited, they are folding and not retractable propellers.
When the engine is switched on, folding blades are spun outwards by centrifugal force.
When the engine is cut off, the pressure of waterflow forces the blades back in place streamline. Since the roots of the blades are linked with geared teeth, they open and close together with the same angle.
I’m not sure about that. Lift are so comfortably ahead of the competition that they can take time to test this kind of fancy prop not so difficult to 3D print or mill by the way.
They have probably been inspired by tests like this one from 2009:
On boats, folding props have proven their efficiency. Prop open, you can get better forward speed and pull compared to a fixed-blade one. Then, when folded, the drag is so marginal that it is difficult to measure. This feature seems to be praised by Lift when going down waves.
Unlike our eFoils with fixed blade props and nozzle. When the motor is cut-off the drag is present and can be measured by a luggage scale towed by a boat.
The winner of the above tests: https://flexofold.com from Denmark