Facebook has a similar setting. If you load a video (any size) at 720P or higher, they bump it down to half that and store that. Same for a lot of higher res photos. That's why a lot of stuff on FB looks fuzzy. I would imagine other sites do similar compression to save space. It's kind of like MP3 for audio - It's not as good sounding as full bandwidth audio, but if you're playing it on your ear buds or from an Alexa Echo you'll never notice a difference. You just want to be able to sing along with it.