Figured I write it down here so the knowledge doesn't get lost :)

For the glitch to work you need to have one character unlocked - doesn't matter which one.

If you're in the character-select screen after that you have exactly 1 frame where the game let's you select everyone even the characters you haven't unlocked yet.

So you can do a left or right input on that very frame. (It's the frame where the Dot after the "A" appears.