One of the video-sharing platform's top Australian officials has been questioned at the anti-Semitism royal commission about the clip, which suggests Arsen Ostrovsky, who survived the massacre despite being shot, was a "crisis actor".
YouTube's community guidelines prohibit hatred against people who are victims of a major violent event, including by denying the event happened.
But senior manager of government affairs and public policy for Australia and New Zealand Rachel Lord said the clip did not violate YouTube's policies.
"What I have been told from the teams that have reviewed the video is that it is non-violative and it remains on the platform," she told the inquiry.
"What we're looking for (in that policy) is denial that the event took place or that people died as a result of the event."
The failure to remove the clip, which includes references to makeup and false flag attacks, showed a "really serious deficiency" in YouTube's guidelines, counsel assisting Richard Lancaster SC said.
Ms Lord also detailed YouTube's policy for removing accounts which breach the platform's terms.
If a channel makes three breaches within 90 days or commits one egregious breach, it might be permanently removed, she said.
Earlier, officials from TikTok said they deployed crisis teams to prevent footage of the Bondi terror attack spreading on the platform within an hour and a half of the massacre, despite having no Australian content moderators.
The Chinese-owned social media giant employs specialist teams to stop emerging trends online before they go viral, officials told the anti-Semitism royal commission.
"It's like our basic police force versus a SWAT team," TikTok's global head of partnerships, elections and market integrity Valiant Richey told the inquiry on Tuesday.
The platform also contacted NSW Police and the eSafety Commission within an hour of the attack.
But while TikTok employs 760 staff and 16 contractors in Sydney and Melbourne, Mr Richey said none of them were involved in content moderation.
"(Content moderators are) based in a large number of locations around the world ... for a variety of different reasons that might relate to labour supply, to language, to local regulations - it's a complex system," he said.
When pressed, Mr Richey said he didn't know why there were no moderators in Australia.
Unlike Meta, which has recently wound back its content moderation and fact-checking efforts, every piece of content uploaded to TikTok goes through automated moderation, company representatives said.
"We also have human moderation at the point of upload, (but) auto moderation oversees everything," TikTok's global head of policy, trust and safety Zachary Hecht said.
Of the more than 110 million videos uploaded in the first three months of 2026, just over 67,000 were removed under TikTok's safety and civility policy, the majority of which used artificial intelligence, Mr Hecht said.
The New York-based executive, who travelled to Australia to give evidence, said TikTok's policies had been based on conversations with members of the Jewish community and hate speech experts.
Analysis by online anti-Semitism database CyberWell showed about 93 per cent of posts violating content rules were removed on TikTok, compared to 77 per cent on Meta's platforms and 37 per cent on YouTube.
