The headphone was a very small analogue receiver that had it's own micro-battery, an inductor and amplifier - all about 4mm wide and 8mm long. You would place it deep inside the ear channel and it was invisible even to a person standing right next to you. The signal was induced by a coil you would wear around you neck and you would pipe raw audio into it.

Similar systems are even now on sale: https://www.olx.ro/oferta/sistem-de-copiat-casca-invizibila-...