First you half fill the pipette with hot water. So at that point it's filled half with hot water in the lower part, half filled with air at room temperature in the upper part. Then you block the top end of the pipette with the tip of your finger and turn the pipette upside down, so the hot water starts flowing down to the blocked side.
However, the presence of hot water now causes the colder air to warm up quickly and expand accordingly. This causes some (mild) pressure to build inside the pipette and water starts being expelled by this pressure. This expelled water is the jet you see leaving the pipette.
The 'trick' works because gases (like air) expand very considerably on heating, roughly in accordance with the Ideal Gas Law. Also, the shape of the pipette helps because the hot water in the top part (after having turned the pipette upside down) takes time to flow to the lower part. This means there's usually enough water in the top part be be expelled by the heating, expanding air.