Yeah I can see how you might find him a bit grating, and the topic is definitely odd. He's one of those people that want an in game reason for everything and won't accept "because the designers thought it looked nice" as a reason. I agree that the market definitely has an affect on these things though. Even the most lore heavy games like Skyrim take aesthetic market preferences into account. There's a reason no Elder Scrolls game takes place in Elsweyr or Black Marsh. It's because those regions are populated by furries, and not even the sort that the furry fandom would like. Sales would definitely take a hit. People want characters they can relate to, and waifus sell, therefore designers rarely stray into the unhuman or the unsexy. I've no doubt that the waifu market was the deciding factor for putting breasts on the Inklings. I normally wouldn't give a video like this a second look, but I'd seen stuff from him before and was curious what possible excuse he could come up with so against my better judgement I watched. I was very surprised by the direction it took.

The TL;DW version is that the designers deliberately promoted females in the game, either to attract more female gamers or to appeal to Western tastes. You can create a character, but there is actually a canon character design that canonically completes the story in each game, and all of them are female. The other allies in the battle against the Octolings are all female except Captain Cuttlefish. The Japanese word for the humanoid Octolings that you fight in the story mode is a portmanteau of Octopus and Amazon (like the warrior women tribes). The whole Inkling society revolves around turf wars and Splatfests for which females are the public face. He cites a 2015 Famitsu interview with Splatoon designers where the designers flat out say "the main emphasis was on the girl, to the extent that we thought at first whether it would be alright to not have a boy" among other things that suggest that the designers actually meant to promote females over males. Combine this with the fact that real life squids are massively dominated by the females (females rip males genitals off and keep them for when they feel like having kids, picking which one they want), and the fact that in game lore says that the Squidlings evolved from actual squids, and you have yourself a shockingly convincing argument that the Inkling society is female dominated. Then the lore also says that the Squidlings' ink is kept in a pouch in their chest, so there must be muscle to squeeze it out from that location. Thus the author arrives at the conclusion that female Inklings have breasts because the breasts are actually muscle, and females have more of that muscle than males because they're the dominant sex in the Inkling universe.

And the TL;DR to the whole theory is: Inklings and Octolings have breasts because it's a female dominated world and their breasts are actually muscle that lets them shoot ink from their chest pouch with more force than males.

Really the whole video might have been more interesting and less cringey if the author had called it "The Inkling World Is Ruled By Women!?", but instead he doesn't get to that stuff until over halfway through.

Whenever a game or movie has humanoid aliens or species that evolved to be more humanoid, and the females have breasts, and someone says they can't take it seriously because of the breasts or the humanoid aliens, I always point them to convergent evolution. Convergent evolution by no means says that all aliens have to be humanoid or mammalian, just that it's perfectly believable that they could be, because if an evolutionary path creates a planet dominating, spacefaring, civilization building species, it's obviously a very successful path for evolution to follow and not all that crazy to think that it could work more than once.

As to the lack of nipples, I don't take that as necessarily being canon, since it's doubtable that Nintendo would consciously choose to not render nipples on a surface that isn't supposed to be seen anyway. They could easily pull a Mario Odyssey and in a later game just suddenly decide to put nipples on the Inklings. But even if they don't have nipples, you're right, Inklings could develop the ability to produce milk for raising young without developing nipples. Just look at platypuses. Platypus moms don't have teats, they sweat the milk out of pores that pool in grooves on her abdomen for the babies to lap up.