I'm having the same problem. It creates a new featured image from a video clip. But then it does not actually display the video as it should.
The weird thing is, it's working just fine, showing the video, as it should on my local copy. When I push it to the live site, it no longer works. It does the auto-generate an image thing and puts that in the video's place.
I can't see that there would be any plugin conflicts causing it, since the plugins are the same as the local site. And the media settings are also exactly the same.
Here is an example page. The image at the top should be a video:
Any help would be appreciated! Thank you.