There's probably some merit to this statement, but I sorta laugh at the difference in harm between 'watching' and 'playing'. Maybe the most candid thing for us to do is acknowledge that the "harm" we're talking about is a lack of gratification.
(At least, this is how it is for me, can’t speak for the GP.)
The PS5 is really nice at this because you don't even have to exit the game. Just send it into rest mode and when you come back your game is still running ready to pick up where you left off.
For me it's a lot more satisfying than watching a YouTube video, but YMMV.
Actually a really big harm is the opportunity cost and substitution for real life.
Video games feel like achievement but they're not --> so they don't get the rewards in life that come with real achievement --> so when they engage with real life it kinda sucks (from neglected chores, to neglected career and relationships) --> So they go to video games for that gratification feeling of status/achievement.
People putting in those 80 hours to get that one bonus and the guy trying to get all the Steam achievements are spiritually the same person, whether the source of the dopamine rushes is virtual or analog doesn't make much of a difference, including in terms of resulting misery.
Games as a form of creativity, play and connection are fantastic precisely because they're simply leisure activities, something increasingly lost on most people.
I don't quite see your logic here. How is it "harm-reduced"? Playing a game can be quite enriching and stimulating, whereas watching a video you're just sitting completely idle. To me, it sounds like you're just irrationally worried about playing a game for some reason.
I think this suggestion does the opposite of help.
However... I have a little cousin in my family, and all she does it watch twitch. I've asked before "Don't want to play the games you're watching?" and she looks at me like I asked to solve fusion.
So, there is a hand shake meme of people who play because of twitch and people who just want to watch twitch... Good for twitch. Bad for humans.