And according to that language, YouTube should be demoted quite a lot - we know it receives tons of takedown notices. Just search for any copyrighted video in history, it's on YouTube.
You keep repeating the same point, which is confusing. How is this any different than Google is treating vimeo? Google is not looking at the number of takedown requests companies file with vimeo (they can't, in fact, takedown notices are AFAIK only public record if they proceed to a court case (companies that publish to chillingeffects do so voluntarily)), so they're only using the number of takedown requests they receive to remove search results linking to videos on vimeo. That's the same as youtube.
Based on those numbers, neither are likely to be impacted by this, but you appear to want google to actually treat youtube differently (using "don't host this" instead of "don't return a link for this" as a signal).
YouTube has 5x more requests there than Vimeo. So it seems like it should be demoted 5x more?
Possibly the answer is 0, so 5x more is still 0. And that would be ok.
But if the answer is anything other than 0, and YouTube is not demoted more than Vimeo, then that is different treatment.
Of course the problem is that we don't see what goes into search results, so we won't see these demotions. If we see Vimeo ranked lower than YouTube, it could be for other reasons. And given the extremely strong position of google.com, this is exactly the issue.
According to the links, YouTube receives two complaints per week, compared to one per week for Vimeo. The total number of complaints is 251 and 56, respectively.
Compare that to the top of the list, filestube.com, which receives almost 700 complaints per week and has a total of over sixty thousand complaints.
I would hope that this update would not affect either YouTube or Vimeo, or any other domain with such a vanishingly small number of complaints.
It does seem then that it will not currently target YouTube or Vimeo, good point.
However, what if in a year copyright holders decide that sending takedowns directly to google.com is better for some reason? (Due for example to some technical legal matter.) Do you honestly think that if that happened, Google would demote YouTube?
That's the conflict of interest, and it's the first big issue here.
The second big issue is that there are lots of takedowns for YouTube. They just go to YouTube currently and not to Google directly. But if the principle of the matter were valid - if a site that had a lot of actual takedown notices, i.e., evidence that infringing content goes up on them, were a site worthy of demotion - then in principle, it should not matter where the takedowns go. It is their existence that matters. But they are being ignored for the biggest content uploading site on the web, YouTube, owned by Google - making the demotion of any site that ends up demoted by this new policy highly ironic.