I found an inconsistency.
I created an object, sized it to the dimensions of my video, pasted in the iFrame code via HTML properties, and clicked out of it. The code showed up as text. I took a look and noticed that Hype had inserted a div and swapped out the carets within the iFrame code for caret character codes. I replaced the caret character codes with carets and everything was fine.
Then, as a test, I created another object, left it at the default size and pasted in the iFrame code. No problems. The poster frame instantly appeared. Then I set the object to the desired size.
Not sure why it messes with the formatting when pasting into a resized object….