Instead of turning handlebars and so turning the wheel, fold out handles would detect force. The wheel would then turn independently based on the force exerted, combined with input from a number of autopilot sensors.
So you lean left and it turns left*. Seems to make sense until you think about how you weight yourself on a bike. As you turn left you automatically lean to the left which puts more weight on the left of the bike. The sensors detect more pressure and turn left more sharply forcing you to put even more weight one the left handlebar. Repeat until crashed.
*This also applies to leaning right but all the references to left should be replaced by right