> why is my browser not similarly circumventing this protection?
Because your browser also runs the javascript that displays the ads (unless you've also blocked them, which I think could also be considered a "circumvention measure", IANAL).
If ads we're required, they could certainly not stream a video until the ads have been watched (or at least downloaded and the correct amount of time has passed), they could also insert ads as segments of video without having to transcode all videos for every user, but they don't.
> they could also insert ads as segments of video without having to transcode all videos for every user
That would work in a livestream very well, but not in a video. Imagine everyone getting adverts in the voice of live streamer in the different times of the livestream, and live chat getting time-dilated to compensate, without the streamer itself noticing.
Sorry this isn't really an argument. How can someone not make the argument regarding the browser in court and not have it align with the German court's prior finding?
Because your browser also runs the javascript that displays the ads (unless you've also blocked them, which I think could also be considered a "circumvention measure", IANAL).