I've played Privateer quite a bit, but haven't noticed this bug. I guess I just haven't pitched or yawed violently enough for it to happen.
I don't think I'll be copying this particular bug, though...
That'd be a little difficult, seeing as there's no 3D spaceflight in P:AS.
As for the trick, you have to keep changing pitch/yaw rapidly back and forth, so your path viewed from an independent observer would look something like a sine wave.
(Sometimes very "something". )