That will be a controls nightmare… Considering
1.3 Extensions can include audio only if they include controls which allow viewers to adjust the volume, and by default, these controls are set to off/muted.
(I’m fairly sure that video/component overlays are also just not allowed to play audio at all but I can no longer find that rule)
Video over video is a UI nightmare of users. And essentially doubles the bandwidth involved for the page… Or gets weird if you for some reason overlay the same stream, which then overlays the same stream which then overlays the same stream, and so on
There are lots of things that work on local test but don’t on hosted test or above.
It won’t work on hosted test (where the enforcement policies operate better, due to how web browsers work and the nature of your local test, local test will generally not apply policies correctly)
In addition it won’t be permitted past the review process.
You may wish to read the policy documentation:
1.2 Extensions may not use iframes.