Earlier quoted context omitted.
There’s an easier way than that: embed from youtube-nocookie.com. Of course that doesn’t necessarily help with the Munich ruling…
IP information will still be sent to Google, and a notice would have to put up before. Easiest way to deal with this is to self-host the videos. Most people over-estimate how popular their websites are, and for the ones who don't, getting a dedicated instance with unmetered bandwidth is trivial to get and setup for video-hosting.
Plus YouTube handles all re-encoding and adjust the quality based on the speed and device.
It is possible to do it with open-source components, but it requires a server farm and just not feasible using single cheap private server or VPS.