Do not assume that the apparent change in tail rotor RPM is because it is slowing down. Perhaps it is speeding up? The 206 produces a very distinctive tail rotor growl. Listening to the audio portion of that clip, it appears - at least to me - that the tail rotor is increasing in RPM. The video itself shows the nose yaw to the left. The helicopter drops like a rock.
These three things persuade me that it was an input drive shaft failure (the one that goes from the engine to the transmission). 206 drivers know that when you lose this drive shaft the engine is now powering the tail rotor, not the transmission. We are told that the N2 governor will hold the engine rpm at 100%, and that may be so. But I'd still bet that there are some RPM excursions while the governor plays catch-up.
An IDS failure would account for the apparent speed-up of the tail rotor, the left yaw of the nose, and the sudden, violent vertical descent.
To answer Rob Melvini's question... Yes, if the pilot had more altitude he certainly could have autorotated to a safe landing. But having all that beating and banging going on back there would have been disconcerting to say the least! In such an emergency, 206 pilots are cautioned to not roll the throttle off; doing so would remove power to the tail rotor, giving you yet another emergency on the way down! (I wonder if Bell has rectified this peculiarity with the 505?) But as one with "more than a couple" hours in 206's, even I would be sorely tempted to impulsively roll it off, and in my highly-stressed state of mind I might do just that.