Sorry, but I'm a hater of this theory and have to object:
but there is enough evidence in Gen 2's code to suggest one was used.
There really isn't...
This video is like
80% "explaining how binary and computer colors work for the uninformed" (in a way that's correct but has nothing to do with proving whether or not the theory is true)
and 20% "every time that the input was the exact same color, the output was also the exact same color" as the literal only piece of evidence
which
would be compelling... if not for the subsequent reveal that every time that the input was the exact same color, the Pokémon were part of the same evolution line, so the fact that they shared a color to begin with was a conscious artistic choice and
of course the Shiny would stick with it
Then he basically goes "I couldn't figure out a consistent pattern at all, BUT all of the times a Shiny doesn't do what I expected, it looks really cool, so I think a human made those ones! it's not like they had to use the algorithm for
every Pokémon"
There's a whole lot of "hey, the algorithm (TM) isn't in the code at all and must have been done externally, so any time there's an exception, it's simply because they didn't use an algorithm in those cases; a human did design some of the Shinies. but not all of them! only the ones I like!"
This is just a millionth case of someone pushing a baseless conspiracy theory to explain why there are Shinies they don't personally like
and getting praised for it because they have the coldest takes in the world on which Shinies are "good" and which aren't and everyone thinks that's some kind of unsolved mystery
Nothing here is evidence of

the Shiny algorithm
Edit: okay, serious counterargument
We're talking about an "algorithm" that was apparently finicky enough to give these three similar-looking Pokémon completely different Shinies
We're supposing there had to be an
exact match for it to spit out a comparable output
but then in Gen III, where all of their base sprites had entirely different base palettes made from scratch - for a completely new art style - and could not possibly have ended up with the same result from the same algorithm...
... they handmade their preferred interpretation of
those Shiny palettes in the new art style.
But only for the old ones, right? They were still using "the algorithm" to come up with Shiny ideas for the
new Pokémon?
And then they went through this process
every single time they made new sprites with new palettes for old Pokémon - that is, we're supposing they consistently did Shiny palettes by hand, for
everything except the current Gen, to maintain consistency between games...
... even for Pokémon whose base color palettes were observably different between games...
They did all of this with intentionality, but they also "only started designing" Shinies as recently as the 3D era? Only old designs got this privilege? The algorithm that was allegedly created to save effort got first dibs on every design all the way through Gen V, but they were fine spending as much time as they needed faithfully
recreating what it put out in every subsequent game?
The "theory" doesn't hold up to the slightest bit of scrutiny.
It's not like people don't have complaints about plenty of new Shinies anyway;
they just stopped being able to default to the conspiracy angle when the games switched to 3D models,
and they haven't yet managed to grapple with the possibility that the designer might have had different goals and preferences than them to begin with...