For whatever reason, I never noticed that before!
I just played with it, however, and am seeing the same search results regardless of the country I have chosen (I tried selecting something very American - for example "Chicago Cubs baseball" - and set my location for Egypt...where there isn't likely to be a lot of Cubs baseball highlights uploaded). I had assumed that the results would be near Zero. But, no...plenty of Cubs baseball highlights.
I wonder, does YT revert back to WorldWide results should nothing be found in your selected country?
EDIT: I may have answered my own question. I searched the YT forums for this topic and discovered a great deal of confusion. Apparently all this feature at the bottom of the page does is sort the FEATURED/SPOTLIGHTED videos by Country. So, in my example above, I would see Featured content, when available, from Egypt on my search query. If there are no such videos available, it will revert to WorldWide. Also, I would see the most popular videos in Egypt on my Home Page. My search results, however, would be the same anyone else with any other country selected.
So, the question still remains - would the search results be different by Country based on the user's IP? I'm thinking the answer is 'No' - it would be the same. But, let's check:
In the U.S. - the top search results for "world finance" is:
1. WORLD FINANCE LEADERS WARN OF UNCERTAINTY
2. World financial crisis is a "catch 22"
3. Made in Germany | World Financial Crisis: Is there Hope for the Stock Markets
4. A Message From Babaji - World Financial Crisis
5. Math Saves The World! Financial Engineering at South Dakota State University
Friends in other lands, what do you get?
Should the results be different, for me anyway, this might open up a whole new set of possibilities. Perhaps I can't rank on the first page for "World Finance" in the U.S. - but can my video for the same keyword rank on the first page for Italian users, for example? Sure, I might need to hire some Italian uploaders to achieve this but, depending on the keyword, it might be worth it. I've never seen this topic discussed before.
Sorry, OP if I'm taking your post in a different direction but you got my wheels turning.