Tldr is it's akin to copyright strike on YouTube even though the content it's striking is transformative or commentary. Sure you could win the battle if it comes to the meat of the matter but in the end it's a huge time sink fighting it.
I'm not sure if the policy actually exists in China or this is just an in-story element though.
Does anyone know these rules they keep talking about that prevents him from making videos? Like they're just not allowed to make videos with movie clips anymore?
I'm not a lawyer or someone who produces content in China, but based on my understanding:
In 2019, China passed the "Standards and Detailed Rules for the Review of Online Short Video Content", detailing 100 types of prohibited video content, such as fascist content, pornography, etc., which aimed to fill in the gap from the rise of digital content for their censorship laws. In 2021, they followed this up with an ammendment to account for copyright content and edits. (Not sure what else changed cuz the number of types is still 100). This is likely what the story is referencing since the novel was completed in 2021.
In practice, the movie industry and other digital content owners mostly turn a blind eye towards promotional or transformative content, such as commentary, "abridged versions", meme edits, etc. for reasons we're familiar with. However, the fact remains that industry and community are not in a win-win state legally.
Sources:
http://m.ce.cn/bwzg/202501/15/t20250115_39266759.shtml
https://baike.baidu.com/item/网络短视频内容审核标准细则/23244422