A potential difference is induced across the brass pendulum, and the current flows such that it opposes the motion of the pendulum (due to Lenz's Law).

Brass is not a magnetic material, so the magnet is not slowing down by attracting the brass (as shown by the fact that the pendulum with slits in is not slowed down). However, when the pendulum with slits in is swung through the magnetic field, the eddy currents (which cause the pendulum to slow) are not so free to move within it. Thus Lenz's Law does not have as much effect; the current does not flow as much, so the motion is not opposed as much.

This demonstrates Lenz's Law, and why a laminated core is more efficient in a transformer.