I am not surprised to hear that a different player will be treated differently by users. You just need it to look slightly different or behave slightly differently and it's completely alien and not to be trusted.
The lite-youtube-embed as demoed (even with the title visible) doesn't let me click through to the actual youtube page. There's no link. It could even appear as a no-right-click-esque attempt to prevent me from going to the actual source of the "content" -- it's hostile. Of course, this specific feature could be added easily enough, but it points out a bigger issue.
I almost never play embedded video, but when I do it might as well be the normal youtube experience. If you've wrapped it in what looks like yet another layer (for an unknown purpose), I'm going to be less likely to click on it. You're asking me to contend with youtube/google and another unknown entity.
This article's "nothing sacrificed" is an example of the mistaken belief that developers know how their (or other) software is used by users. You don't and you can't. Not really. You're always guessing.
To be clear, I also want less videos everywhere, less google in everything, less megabytes of javascript in everything, etc. Please stop embedding youtube videos everywhere, to vote for a better web.