I think that's the catch, and Google (or their lawyers) are trying to interpret it more broadly than it appears to be. I also took it as Youtube could use the videos for promoting the Youtube service, but other Alphabet properties don't fall under that ToS.

Then again I'm not a lawyer so I could be completely wrong. Hopefully this gets sorted and the guy gets properly compensated. It's not like Google can't afford it, and it would be positive publicity for them. Of course, it could also set a precedent and they would face lawsuits from other content creators, so I can understand their desire to fight it.

> Also that clause appears to apply to Youtube using content from the site to promote Youtube's service

I'm not sure about that. The preceding statement of "including without limitation" to the mention of promotion seems like Youtube et al can use your content for literally anything they want. However, if that's the case then why bother including the mention of promotion and redistribution at all?

Looks like it's kinda up to the courts how to interpret it, but, also, it looks like your logic is valid with it being more restrictive than permissive.

"First, some courts have held that an item only falls within the preceding noun if it falls within one of the items in the list. The thinking is that if the preceding noun were being used to convey its unrestricted meaning, referring to subcategories of that word would serve no purpose. See, e.g., Application of Central Airlines, 185 P.2d 919 (Okla. 1947) (holding, with respect to use of the word including, that “if the lawmakers had intended the general words to be used in their unrestricted sense they would have made no mention of the particular classes”)." [1]

[1]: http://www.adamsdrafting.com/including-without-limitation/