What people see and viscerally understand is that they 1) upload a video and 2) get a link that they can share with others. Up to this point, it's the same as e.g. Dropbox.

What's not immediately clear is that the video (and channel) now shows up in search results. You won't be aware of that unless you either have a clear mental model of the platform, or try to search for the video title yourself (which implies a certain sort of mental model to be present already).

Upon opening YouTube the visitor is faced with videos published by others. Upon uploading there's one input dropdown right in front and center of the user, by default saying Public.

Sure, people only skim and headline-read articles, but because most articles are shit. That doesn't mean people don't ponder at least a bit when faced with a YT upload page. (And the upload through mobile app is probably more common for non-pro [first time, casual, accidental(!?)] youtubers, there the privacy: public field is pretty visible, legible and explicit.

They can mean anything in people's mind, public is that yeah anyone I send the link can see it, but that's not exactly YT's fault, that people don't make the connection, and somehow live in a fantasy world.