It’s probably both as all modern Intel igpus have video decoding and encoding hardware

Yes

Probably both, the drivers are almost the same, just need a kernel flag.

If so that’s great for everybody… well almost everybody period, most notebooks have Intel gpus even if they have Optimus too.

As a layman, what does this mean roughly? Videos played on youtube will use more GPU than CPU?

That will also help LibreWolf, I can’t say if the code will make it into IceCat, if t’s ever updated, or Abrowser.