Where are you seeing that hotlinking is not allowed? The only mention I see of it is if using it for commercial purposes is not allowed.
Have you looked into using Peertube at all? Seems like if you can find a good instance, it would work well. It's also more optimized than direct video link sharing and can handle the multiple quality levels transparently.
Personally, the whole reason I built Tesseract is because I hate leaving the app for media content and generally won't. This host doesn't provide any direct access to the file; it can only be viewed from the outside page. Even Imgur will give you a direct link for embedding.
For Catbox, I do use it from time to time for some medium-sized GIFs, but I'll usually wrap the link in Tesseract's media proxy so it only has to fetch the original file once every few days at most (it keeps 'hot' items in the cache longer and can re-fetch as needed). Granted, not all Tesseract installations in the wild enable the media proxy (it's disabled by default), so that may not be an option for everyone.
That said, I now want to spice up some meeting recordings with some unnecessary bleeping