They edited it!
Basically, they shot one piece where they had the actress walk to the block, kneel and the executioner raise his axe, then there was a cut and they put a dummy in her place, and they continued the shooting and then cut the relevant frames together to make it look like that executioner had sliced her head right through! Afterwards, he picks up th ehead and displays it.
This, like the Lumiere's train pulling into the station, caused a sensation, and while it does pre-date Melies, it has nowhere near the complexity of his films.