Legally speaking, they have a right to distribute copies. But Youtube isn't required to accept it though, and their copyright claim system is already somewhat notorious for the degree to which non-copyright owners to try to strike down videos for claimed copyright infringement.

Steamboat Willie is probably the single most famous work to fall into the public domain since Youtube started. It is (formerly) owned by one of the most famously aggressive company in protecting IP. Youtube itself is also owned by an entity that is on the other side of IP law than Disney, but definitely far less aggressive in pushing those claims.

Hmmm, is the term "Mickey Mouse" trademarked?

As in, would a new name be needed for any new "Mickey Mouse" animation created using the old Steamboat Willie (mouse) character?

Mickey Mouse is trademarked as a word and as a picture and all kinds of derivatives like the silhouette of his head or the design of the eared hats. You can't use him as a symbol of your business or to suggest that your product comes from Disney, but none of that will stop you from making a new creative work featuring Mickey as he appeared in Steamboat Willie any more than McDonald's can stop you from writing a book where characters eat a Happy Meal.

Makes sense, thanks. :)

You have to make pains to not look like you're representing yourself as Disney, _and_ you can't step on anything Disney did in later Mickey cartoons

Sure you can. You just can't infringe subsequent copyrighted works.

But if there's an episode where that character goes to space or whatever your derivative work can do that too.