At first I thought it was temp, and just an advanced form thing. Now I'm not so sure.

Spoiler:
I think it may be spirit bending. Since it isn't elemental bending, he can pass it off as chi blocking. The creators seem to be keep a balance of power between hero and villain by giving them either a big army or extraordinary abilities. Like the mob guy from 40 years ago... man had mad bloodbending. Same with Tarlok.

That said, if it is spirit bending, Korra will be able to reverse it at some point once she taps into her Avatarz.


But Lin.

Spoiler:
It's funny how losing bending is basically like an execution in this show.


We'll see her again, I'm sure~ When she gets with Bolin.