Re: when the answer comes right out of nowhere
It was likely used for that purpose because Windows Media Player would color-key to a super dark, nearly black magenta. This was on pre-Vista PCs. I discovered this trick on an early 2000s laptop when playing around with screenshotting a DVD and pasting it into Paint.
Anyone could spin up an overlay using DirectDraw. You'd create an overlay surface, define the color key, and send data/flip it using the correct YUV format. In my own experiments I had used the packed UYVY format.
Windows Vista removed support for these video overlays due to conflicting with the Direct3D based Desktop Window Manager. DRM video today uses a newer overlay format that is seamlessly composited by DWM but when you take a screenshot the video gets blacked out, but any playback controls that were overlaid still rendered in the screenshot. Also, since Windows 7 with a simple API you can declare any top-level window to be DRMed with a single API call, and will be blacked out from any screenshots, or even hidden entirely.