Thanks for your reply Mary. Unfortunately I'm embedding videos from a site that is not automatically recognised by Moodle. I have found a solution however. It appears that the HTML tidy filter is causing this issue. Disabling this filter fixes the problem.
It may be worth listing this as a bug.
I looked into your Filter suggestion and saw that my HTML Tidy filter was already disabled. I am currently struggling with displaying an embedded presentation in full screen. I am using the H5P plugin Presentation activity. When uploading a presentation the embed <iframe> link is readily available. I copy and paste this link to my course topic and the presentation is displayed, but the full screen doesn't cover the entire monitor. The bottom 3rd of the screen is just black.
Is there any workaround for this? I just want my students to be able to view an embedded presentation from a course topic in full screen properly.