How do YouTube links work, and are there limits?

YouTube videos are not downloaded. Google's Gemini reads the public video directly and returns the transcript, using the Gemini key from your Settings. It needs the internet, the video has to be public (not private, not age-restricted), and long videos are read in 15-minute windows. The free Gemini tier allows roughly eight hours of YouTube per day; if you hit the limit, try again later or add the audio as a file instead.