They need to see the move once, and have the skills to perform the move, and they instantly know it. It's overpowered as fuck, even more overpowered than what the Sharingan actually became. They can even freely change the move to suit them, since they actually know it!
It was a really cool set-up in early Naruto, since Kakashi had this huge moveset, but a really small pool of chakra to use it with. And it set up a lot of potential for Sasuke, and made Itachi theoretically really scary.
...except he didn't have that huge moveset, the chakra limits didn't go anywhere at all, and all three of them ended up using like 5 moves, tops.
Blah. Naruto, the definition of a waste of potential.
