Your question is very curious. You ask:
I would like to embed a video in webhelp which by default opens at its Youtube address in a separate tab.
Then you continue with:
Customers with limited (or, no) internet access...
The only way to view YouTube videos on YouTube is to be connected to the internet, no?
I'm not sure I follow the remainder of the query.
I suppose I should add that when you mention WebHelp, I'm making an assumption that the WebHelp is being viewed via a web server perhaps on the internet. I do see where one might have it configured where it's on a company intranet or even installed on a local PC. And in those cases there may not be internet access. Is that what you mean?
I am hosting it on the intranet and machines with no access to internet tend to see the following-
which I'd like to avoid as it seemingly leaves a bad impression (my team opines).
A Youtube video which by default plays in a new tab seems to be the only solution in this situation.
Could you please help?