Returning to the OP:
If your players want to try the house-rule in the video, here are some thoughts that would help go with it.
Exhaustion is a terrifying bad status ailment in 5e. It's very hard to get rid of a single level of exhaustion, and, as anyone who has ever griped about a certain Barbarian subclass knows, while one level isn't the worst, those penalties start to set in quick, which can make a character useless before long. Not to mention eventually dying anyways. Oh and you can't just toss off a lesser restoration and cure a level of fatigue, like in other versions of the game.
When we adopted a level of exhaustion a 0 hp, we adjusted
lesser restoration, allowing it to remove a level of exhaustion but ONLY the first and second levels. You could upcast it to affect higher levels of exhaustion. For example, if a PC has 3 levels of exhaustion, lesser restoration cast with a 3rd-level slot would remove that one level.
Another house-rule is
Endurance: you ignore the effects of exhaustion up to a level equal to your Constitution modifier.
For example, if you have CON 15, the first two levels of exhaustion to not affect you, however once you have a 3rd level of exhaustion, all the effects are there.
Then you have the fact that in-combat healing is deliberately not great in 5e, by design. I had a thread griping about this a few months back. The response I got was "lol, out of combat healing is too good, in-combat healing is fine". So even if a Cleric did nothing else but throw out his best Cure Wounds each turn on the Fighter getting the tar beat out of him by monsters to prevent him from taking Exhaustion, they would have a very hard time keeping up, and quickly run out of spell slots. And be unable to cast anything else they might want to.
A general house-rule we use for upcasting is
Maximal Upcasting: when you upcast a spell and gain additional dice, those dice are considered to be maximum and you do not roll them.
So, the cleric with Wisdom 18 upcasts
cure wounds using a 3rd-level slot. Instead of 3d8+4 you would get 1d8+4+16 (the max of the additional 2d8s). This gives you an average of 24.5 instead of 17.5.
We do this for
all spells, so it has other impact of course, but it is one of our "Golden House-Rules".
And finally, with players running around with levels of exhaustion, you're not going to get many encounters done, I would think. So the "6-8 encounters to run the party of resources" gets thrown right out the window, as everyone is going to use all their resources as fast as they can, knowing they weren't going to do more than 3-4 encounters that day anyways.
FWIW, I don't run my game with the 6-8 encounters adventuring day, but play with the adventures completely organic. Sometimes the PCs might have just 1 encounter (or none LOL) and other times they might have a dozen! It just depends on what they are doing...
Any way, with the house-rules we've used, the effects of the added levels of exhaustion are mitigated quite a bit, BUT THEY ARE STILL THERE, which does still increase the over all sense of danger.
Now, concerning the end states of combat. Myself and others have proposed different end states that are possible. I'm not sure exactly what you're looking for with that. However, if you want to continue discussing that aspect, please let me know.
Otherwise, as I began, if your players are interested in adopting the video's suggestion, it might help to consider the above house-rules we've been using for well over a year now (well... maximal upcasting might be a bit shy of a year...).
Cheers.