It looks like your "edit" is right (version of lemmy and instance configuration are an issue), with the additional complication that sometimes where it is hosted makes a difference (sometimes the youtube summary is in a different language and/or won't grab it because of regional restrictions) and sometimes the reader app/web interface grabs their own thumbnails and/or may not display thumbnails and/or may even try to just embed the video. There was a post on techsupport a while back about this: https://lemmy.world/post/20180043

I post to !fullmoviesonyoutube@lemm.ee from slrpnk.net and to get a thumbnail, I do the following:

• get a thumbnail image file. either grab it from wikipedia, imdb, or by a screencap that I trim. put that file somewhere on my computer.
• use the web interface with default client. It has a "thumbnail URL" field (which I didn't see back when I had a lemmy.world account - probably version differences) but I can't just upload the image to that field, so I have to...
• go to the post "body" input field and click on the "upload image" button to upload the thumbnail image file from my computer. This uploads the image to the server and adds a line of code to the body input field that looks something like this: ![](https://slrpnk.net/pictrs/image/a-long-UUID.png)
• copy the part from "https" to "png" and put it in the "thumbnail URL" field
• usually I then delete that code from the post "body" input field
• edit: of course, I still have to add the youtube URL in the "URL" field...

I think this adds thumbnails, but of course I can never be sure because someone can always use a client or configuration I'm unaware of. That's the price of freedom from a single corporate server and a limited choice of viewer clients.
Ideally this whole process would be easier or automatic. I imagine the situation/process will change as time gones on.