Phase transition is the change from one physical state to another. Given the scientific explanations given in-game such as the reference to Planck Scale and that Phase Transition Weaponry seems to be a very powerful form of energy emission in the form of powerful plasma beams this likely refers to the direct conversion of mass to energy according to Einstein theory which eventually led to atomic weaponry. This would be therefore similar to what happens when anti-matter comes into collision with its corresponding matter resulting in the release of massive amounts of energy hence Shion Uzuki's comment "You could vaporize a whole star with this." How this is achieved is not said.
Later in Episode III, T-elos is demonstrated to have an integral and much more compact Phase Transfer Cannon installed in her chest. T-elos ability is known as U-TENERITAS. KOS-MOS later reveals an integral Phase Transfer Cannon of her own in her final battle with T-elos on the way to Zarathustra. KOS-MOS' ability is known as D-TENERITAS.