This is, effectively, no different than a carousel of algorithm-recommended content. However, UX studies have found users reluctant to watch something recommended to them. It requires making an affirmative decision on time investment. Most people have the experience of a friend recommending a movie or book and still being reluctant to dive in.
The problem is very similar to dating apps, if you think about it. This is why Tinder's innovation on "swipe left/right" took off the way it did. In UX terms it's better to drop users into something and make the cognitive effort be choosing to get out of it rather than choosing to get into it. It's a big part of why TikTok works.
The reason this isn't more common in video apps has more to do with UX norms at this point. Another important thing I learned about streaming at Disney was that no one really cares how innovative the browsing experience is. They just want to watch Frozen. They're used to carousels now, and they're easy to program. This, I think, speaks more to your sensibilities.
I typically share your mindset, but I can see the appeal. There was something nice about the TV that just, ya know, already had something going when you turned it on. I spent many happy evenings in hazy basement rooms enjoying whatever Adult Swim decided was going to be on the TV that night.
I chalk it up to overwhelming choices. Sometimes I just want to watch something but don't want to go through dozens of options and having decision anxiety.
Bonus is sometimes I discover something I never thought I would have liked.