The videos that fall into this category won't be able to run ads and those who post them won't be able to make money off of the content. Comments will also be disabled. Additionally, these videos won't be included in any recommended lists or be able to play when embedded in other websites and a warning screen will appear before they play. The restrictions are meant to curtail engagement and minimize the videos' reach.
Along with this "limited state" for extremist videos, Google has also introduced a Redirect Method that sends users searching for certain keywords to videos that counter extremist content. And the company has been using machine learning video detection to track down and remove content that violates YouTube's policies.
Those that post videos affected by the policy will receive a note from the company and they'll be able to appeal the decision if they feel the restrictions are unwarranted.