YouTube presented a list of resolutions for video playback along with an Auto option, which allowed the app to automatically adjust the video quality depending on the speed of your Internet connection.
But now, under the Quality menu of the video, you see a total of only four options - Auto, Higher picture quality, Data saver, and Advanced. Auto continues to work like before, while the Higher picture quality setting uses more data for a better quality stream. In our experience, it capped the streaming to 720p even on a high-speed Wi-Fi connection.