The video quality will default to "Auto-1080p" or similar but it will be visibly much worse than 1080p quality. Switching to 1080p manually seems to be the only way to get good quality.
I strongly suspect that at least part of the reason for these is to discourage people from using Google's properties with browsers other than Chrome (whether it was the reason for creating them, or just noted as a benefit for refusing to fix them once they were identified).
I'm not sure how that isn't soundcloud/spotify.
While this is admittedly rather handwawy, even outside of this I have the impression that there must have been some lengthening: It feels like basically every Rock & Roll song from the 50s/early 60s mostly is around the two minute mark and very rarely even approaches three minutes. Afterwards however, three or four minutes doesn't seem that unusual to encounter, never mind those really long songs, too.
Not sure how it is implemented. It seems to just identify and catalog all of the videos uploaded to normal YouTube where the audio track consists of a single continuous musical track. It's not official music videos.