Shademp
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Discovered by Japanese players a few months ago and uploaded on Nicovideo, KartSeven of YouTube has now uploaded his own video demonstrating the glitch.
During this kind of discussions, you're not supposed to control your character, and the game is programmed to cancel movements during these phases. But in this scene, when Reeve is talking with Hojo, the game shows the field with Hojo, the same field when we're supposed to fight him later. And if you hold down, right and run buttons while the game fades to Hojo's field, the game will consider you move towards the good location, and it directly triggers the boss scene and the battle against Hojo, disregarding all the stuff before (Sector 8 underground, Turks, Proud Clod) !
Cloud is invisible when the boss scene starts, and even after the battle. On PSX, you won't get a single music until the end of the disc 2 as well, except the Fanfare once you defeat Hojo... but the Fanfare stays after, and for a long time (in fact, until the scene with Cloud and Tifa, outside the Highwind) ! ^^ On PC, I didn't notice a problem with the music.
This trick is definitely a huge discovery for a speedrun. About a Low Level, it's unfortunately not enough to finish the game at level 26, but you can do a lot more of extra battles and still finish the game at level 27 !
Thanks for those who discovered this Japanese video.