Yup, embeds remote url. Most web clients seem to do the same.
Discussion
Youtube I could embed as video. The problem is more with links to random servers that could track users IP addresses and user agents.
Hmm, good point.
If you want to proxy YouTube links without having to be the one providing the proxy, you can convert YouTube links to invidious proxy ones! So for the video I just posted, you’d instead convert it to: