Drago was down 41-65 with only blue, pink and black on the table. So he needed 6 points from snookers to be able to tie. He forced a snooker on the blue, moving back to 46-65, but still needing a snooker. Drago's next shot was a great safety behind the pink, and McManus was unable to make the shot, with a kiss on the pink leaving Drago only 52-65 down, and with enough points on the table to take the frame. Additionally, there was a free ball, as Drago didn't have a clear line to to both sides of the blue.
The final shot
Drago still has work to do, and needs to clear the table (pink as free shot, any colour, then blue, pink and black). So he plays the shot with a lot of pace to get position on the blue or black, but the pink rattles out of the pocket, leaving McManus with a relatively simple shot on the blue.
Drago walks towards McManus, says "Cheers, Alan", and offers him his hand, which McManus accepts. This is the accepted way to concede a snooker match.
The referee announces "Frame", and Drago says immediately "?????", causing the referee to ask "Do you want to withdraw the concession".
I assume that Drago made a miscalculation, and thought at first that he needed to make the free ball and extra colour to be left without requiring snookers. But after checking the scoreboard he realizes that he is only down by 13 points, and that McManus needs to at least make the blue.
The (non) retraction
Drago considers his position and states something like "I don't know?? .... only down 15 points???", presumably pointing out his confusion, and that he only conceded due to making a mistake on the score. But when asked again he says that withdrawing the concession "wouldn't be fair to Alan".
Drago wasn't prepared to go back on a handshake, even though he gave it under a misapprehension. McManus was asked if he was happy to accepted the concession, and he said "I am, absolutely", so Drago officially conceded the match.
Getting to your questions
- Technically, Drago offered to concede the match, which he can do at any time, and McManus accepted.
- The discussion between the players is as above, but I couldn't make out the words of the two vital statements from Drago.
- Drago was upset for conceding too soon, after having fought back with two snookers. It is very unusual to concede while there are enough points on the table, and had he not misjudged the score he would have let McManus take the pot on the blue.