Yes, the author uses a globally-adaptive time stepper, which is only efficient for very small N. There are adaptive time step methods that are local, and those are used for large systems.

If you see bodies flung out after close passes, three solutions are available: reduce the time step, use a higher order time integrator, and (the most common method) add regularization. Regularization (often called "softening") removes the singularity by adding a constant to the squared distance. So 1 over zero becomes one over a small-ish and finite number.

The suggested method of trying two time steps and comparing the accelerations does about twice as many calculations per simulation step, which don't require twice the time thanks to coherent memory access: a reasonable price to pay to ensure that every time step is small enough.

Optimistic fixed time steps are just going to work well almost always and almost everywhere, accumulating errors behind your back at every episode of close approach.