If this actually works solidly, Google is in deep, deep, deep shit. It would mean that I can put a mark on my non-AI videos and demand that Google not allow upload of my identifiably copyrighted content.
This would completely obliterate YouTube.
If SynthID works, this would allow people to tag their own videos with a watermark that is invariant across various levels of compression and editing. It would enable automated scanning of YouTube videos for uploads and the consequent class-action lawsuits.
Because of that, I can fairly confidently say that this doesn't work. However, it will function to divert some attention for a while. And that's what Google and OpenAI intended in the first place.
Class action? Wouldn't you first have to attempt to follow the official process, filing a DMCA request? And I assume that Google would likely respect that since (unless I'm uninformed) it seems like they typically have so far? I really don't see how this escalates in a way that leaves Google at fault.