Correct me if I'm wrong: when we decode a video we either use software decoding via the cpu or we let a specialized hardware module (usually inside a gpu) handle the decoding in an efficient way. Using Vulkan to decode video basically means writing a decoder in a special way as to accelerate it using the gpu instead of the cpu, which makes it more efficient and faster than cpu decoding and allows older gpus to decode newer formats. Of course it will always be slower and less efficient than the hardware accelerated module but it is more flexible and can actually be updated
Vulkan is primarily a GPU API, but it relatively recently gained a hardware-accelerated video API called Vulkan Video, which is the topic of this post. That it's part of Vulkan is perhaps because video decoders are often bundled with GPUs, though that's not always the case and I believe Vulkan Video can be implemented also where it's separate from the GPU (common on mobile).
"built-in fixed function video unit", "hardware decoder" -- that just means the decoder of each supported codec is physically present as an ASIC, right?
