The worst part of the settlement isn't even the UI changes but how the image search results now seem to favor showing Youtube video frames above showing regular images from non-Google websites.

I guess they get to pass the buck to the video uploaders who have asserted (truthfully or not) that they have a right to upload whatever they're uploading and that they "grant to YouTube a worldwide, non-exclusive, royalty-free, sublicensable and transferable license to use that Content (including to reproduce, distribute, prepare derivative works, display and perform it) in connection with the Service and YouTube’s (and its successors' and Affiliates') business"

I guess one of the ranking signals is probably "amount of legal trouble this result will get us into".

Yup, we can cut them slack on this one -- they didn't want to make it worse.