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Would that mean watching the movie on YouTube via teams? As in crappy youtube quality through teams? Awful.

I'm annoyed you basically have to pirate a movie or go through the faff of actually buying a Blu-ray to watch things in uber-HD properly.

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I think they mean they rented/bought Dune to watch, via YouTube's movie platform[1]. The host of the Microsoft Teams video meeting then likely shared their view of the YouTube screen (I don't know how it works in MS Teams, but, for example, I know Jitsi allows a meeting participant to embed a YouTube video for all to watch+listen to. It's surprisingly good quality)

[1] https://www.youtube.com/watch?v=jd2DrxUi4H8

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