It seems to work correctly with YouTube videos if you post them as an iFrame instead of just posting the link and using the Discourse lazyYT.
In order to for this to work, you must enable YouTube iFrames on your site. To do this go to Settings → “allowed iframes” and whitelist https://www.youtube.com/
Then when you paste an iFrame code (you can find the iFrame code for any video on Youtube under Share → Embed) the YouTube embedded via iFrame will be fully functional with the Media Overlay component. I.e. you need to post:
<iframe width="560" height="315" src="https://www.youtube.com/embed/Ft1waA3p2_w" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
instead of https://www.youtube.com/watch?v=Ft1waA3p2_w
The iframe code won’t work on discourse.org because they haven’t whitelisted https://www.youtube.com in their “allowed iframes” settings, but it’s easy to add to your own forum.
Here’s how it looks on our forum on my phone with the media player expanded:
and collapsed:

