Examples:
In the EU you don't need to filter pornography the same way as in the US. In the US you don't need to filter personal information (eg individuals' faces) the same way as in the EU.
Or does Google need to ban insults of the Thai king?
Which legislation should apply? Already now China has split the global internet in a China and non-China part...
Every nation should have the right to impose whatever restrictions it sees fit on companies wanting to distribute content to that nation.
Is it a pain to do this for the content distributor? Of course! But national sovereignty is far too important to be traded for ease of content distribution.
Of course, there is a problem (which some may consider a benefit) with the design of the Internet itself: there is no easy way to define what it means to distribute content to a particular country. But probably using national IP blocks is going to generally be good enough for many use cases.
However in reality the company acts conservitively and bans content that violates in Thailand for the US. "it's their platform". That's the same case as in the US. (See the article earlier talking about the CCP protest comments on youtube.)
Even more in reality than your example, YouTube is censoring content the US or China or maybe Russia doesn't like everywhere, and it is not censoring content that Thailand or Uzbekistan or wherever else doesn't like even in those countries.
But if the US were to impose a no-censorship policy on YouTube (or at least a no-censorship-except-our-censorship policy), you would probably see some fragmentation to appease both the US and Chinese governments. And if a few dozen other countries did the same, with true force behind their decisions, you would either see YouTube retreating from those countries (perhaps opening the way for local alternatives), or many more YouTube front faces. Either way, there may be some advantages compared to the current system.
They don’t have to, they choose to, in the name of growth.
If New York Times decided to operate in China too, deliver news in chinese about China, they would have the same problem.
If this problem is not addressed, the internet may well segregate along national boundaries (just as you describe).