I'd say that video shows something very different than a lot of other people think it shows.
It shows a driver who is operating a camera with one hand while operating a car with AutoPilot engaged.
It shows a driver operating AutoPilot on a road that is not of the type that Tesla has specified as what AutoPilot should be operated on.
It shows a driver who ignores the fact that the car veers into the other lane once just before this, meaning the car is clearly having trouble making out where to drive. A situation that calls for additional caution.
It shows the car encountering a situation where it cannot make out the lines and immediately handing control back to the user.
It shows the driver not immediately taking control as soon as the beeping and the notice to take control came up. In fact they don't seem to react until the car starts veering. Which is a large part of the reason this video looks so bad.
The car does veer towards the other lane right about where it is right along side the oncoming car. The driver doesn't manage to take control till just slightly past this. So the video actually shows how quickly someone can react. Again this driver was distracted by operating a camera which also left him with only one hand to control the vehicle.
Despite the poor choices of the driver. The car was still able to give the user sufficient notice to take control before it was unaware of where the road was. In fact the beeps start around 1-2 car lengths before it catches up with the oncoming car where it veered into the other lane.
My guess from watching this video many times is that as it comes around the curve there is a glare situation that obstructs the camera's ability to see the lines. Since it'd just come around the curve it hadn't had time to see the lines before so it has no idea where the road is.
The only thing Tesla can mitigate is the fact that the user was operating AutoPilot on a road that they shouldn't have been. But I'm not even convinced of how easy they can do that. Geofencing the feature to specific road types would be very hard. It's very common for roads to run parallel and near to each other. Navigation systems routinely try to match up where you are to a road, but when the roads are parallel it gets it wrong sometimes. Creating situations where it disengages because it mistakenly believes the car is not on a highway is probably just as dangerous as the situation in that video.
If those situations occur just as often all such a solution would do is shift the dangerous situations from ones like the video where the user could have anticipated the problem due to the visibility issue. To ones where the user can't really predict because it's hard to tell if another road is close enough and sometimes the determination can flip from one road to another.
It's much easier to sit there and say what Tesla should do based on some anecdotal videos with no data to backup that certain actions would improve the safety of the system than it is to actually make the system safer.