That's simply pace dialled up, not racecraft and not good AI. It's ironic that the example timestamp you used demonstrates this perfectly. If you watch from around 2:09, the car on the left here makes zero, and I mean zero attempt to defend its position, despite the fact it had countless opportunities to do so. Competent AI would have moved right to block the players line, which would have forced the player to try a line to the left, putting them out of position for the next corner. what happens instead is that the AI simply sticks to one of its preset racing lines, allows the player to draft them with zero attempt to break the draft, and then lets then get alongside and then pass on the right with no attempt at all to protect that line.
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So thank you for providing an excellent example of the utter lack of racecraft in GTs AI.