Copy the link, then paste it into your reply.
The "embed" option is for HTML operations.
Yes, it will auto-embed if you provide the link.
Just FYI: I had issues using secure YouTube links with the forum modification ("https") so if you have the same problem, remove the "s" from "https" and post the link. Preview first to make sure your videos work
And try to avoid 50 YouTube embeds in the same post/thread, those of us who currently have cruddy computers will appreciate it