Dithering is usually applied as pre or post processing step to encoding/decoding because accurately encoding dither itself actually takes more bits than just encoding without banding would in the first place. Nowadays the easiest way to sidestep banding is to use >8 bit encoding and a codec with good psycho-visual enhancements & perceptual quantization.
Of course as post-processing step, yes. Dithering is not uncommon in games to avoid posterization of gradients (which can happen even with 24-bit colors without any extra quantization) so it would be pretty natural for media players to do it as well. And doing it in the player would mean older videos without fancy 10-bit PQ stuff would benefit as well.
I'd be curious to know more about how this is done in games.
I have noticed that if you get up close to the surface of a car in a lot of modern racing games it has a very noisy/sparkly shader. I know some paint does look like this, but I always suspected this was to prevent banding by creating sub-pixel noise.
