The URL when posted would first have to start with:
[youtube.com...]
{SIMPLETEXT} only allows for "Characters from the latin alphabet (A-Z), numbers, spaces, commas, dots, minus, plus, hyphen and underscore".
If the posted URL doesn't meet that criteria its rejected and parsed as plain text. If it does meet that criteria the second panel allows for replacement which in this case would be the HTML provided by youtube (note I shortened it to keep it simple):