The main issue is that I can reproduce this with any untouched APK from version 2022022500(MiVideo-GP) onwards, while any APK older than that works fine...
Also, this can be only reproduced while logged in to your Google account in Mi Video. If not logged in, online videos work fine.
Very strange indeed...
Good news, seems like it indeed was an official app issue, and seems to be fixed in version 2022040600(MiVideo-GP) that was just released.
I'll get the app updated on our side for the next release.
The broken behavior is due to incorrect YouTube API implementation, which is the major thing they fixed in 2022040600(MiVideo-GP).
Now it works as good as it used to in 2022012900(MiVideo-GP) and older.