Thanks, George. That works fine, though I have to say it seems kind of bizarre.
1. It's correct behaviour that you apply a link to a piece of text and then that text disappears to be replaced by an embedded video?
2. Does this mean the information in the Help docs is inaccurate, irrelevant or just easily misunderstood?
Insert the URL of the multimedia resource into your text (which can be the URL of a file in the course files area). When displayed a suitable player will be provided. Totara detects the media type using the filename extension, so you should ensure that the file contents match the extension correctly. [...]
To embed the youtube video, enclose the video URL in [youtube] tags.
(http://help.totaralms.com/Multimedia_Plugin.htm)