Tom Scott explains this best.
Essentially, the effect that Tom describes in the video above, with Snow and Confetti, also seems to apply to the grass and foliage in ARMA 3. See my video here for an example.
Whenever I start to run, or quickly jerk my view point from side to side, the image suddenly gets almost completely lost in compression artefacts. I’ve seen the same issue in other people’s videos, and it just occurred to me that this may be the problem.
Looking around on forum posts elsewhere on the web, it seems that the problem is a combination of YouTube’s specific compression algorithms, and ARMA 3’s ‘Sharpening’ post-process effect, as well as low recording bitrates.
The problem may be solved, or at least alleviated by pushing the bitrate up on your recording software, but obviously, this would put more stress on your system, causing ARMA to run at a lower frame rate, which will also make the video look like crap (As well as making it worse to play)
I’d do it myself if I were at home right now, but if someone would like to test messing around with graphical settings (Particularly Grass + Foliage quality, Sharpening and Anti-Aliasing) and see how it affects the quality of videos, then please do, and let us know what you find. It would be a great help to all of us who like to record our games for prosperity.