Well, to be fair, Nick Engler himself said it wasn't a scientific test and that many more samples would have to be run.
a well-balanced joint with both DOMINO and dowels will be stronger than the wood being joined
Context matters here, too. First, if that were true, then the joints wouldn't have failed on the glue line, as they all did. Second, wood has two kinds of strength:
1) Strength along the grain
2) Strength against the grain
Glue adhesion also has various properties. The "stronger than the wood being joined" really only applies to boards glued long grain to long grain, and that's because:
a) The glue adheres well on long grain
b) The wood is weakest across the grain.
You would never think to cantilever a piece of wood under load that has the grain running perpendicular to the cantilever, so even if you could get glue to adhere just as well to end grain as to long grain (and that's apparently doable), the joint would not be stronger than the wood in that direction.
It's worth pointing that dowels don't need any more specialized machines than dominos. To the contrary, you can successfully dowel with just a cheap dowel jig if you're careful and accurate. But, perhaps the real comparison is to the Mafell DD40 Duo Dowel System (they make at least two sizes there, too). About the same price and same ease of use as dominos (at least in the DF500 size). And it has the same cross-stops that eliminate measuring in many cases and ensure alignment.
Now, the domino system leaves you one degree of freedom for alignment mismatches whereas doweling doesn't. But, sometimes that's a disadantage, like when doing picture frame style miter joints. And dowels are much cheaper than dominos, and easier to shop-make, too.
In terms of strength, there have been enough different ad-hoc tests done that I am personally convinced that dowels can be stronger than dominos. What I suspect is going on is that a dowel is tight fitting all around while a domino is tight only on two faces, and the curve of the domino is actually wasted space in terms of contact area. For the test that Engler did in the video, the domino and (probably) manual mortise and tenon joint are relying on the glue to resist the initial movement. But, since the dowels fit tightly all around, they have some mechanical resistance as well. And, that could be the major difference/advantage.
So, one way to look at it is that the precision required for multiple dowels pays off in the added strength of the resulting joint, at least in some directions. Having the in-line with the domino alignment play (especially if you don't cut "tight" mortises) can be useful at times, but given our domino machine cross-stops it's not always (often?) necessary, and it does sacrifice some strength, IMO anyway.
A true square-cut, properly sized, M&T joint that fits tightly on all four surfaces is still going to be the strongest since it would combine the mechanical resistance in all directions with the highest glue surface area. But, cutting those where not just the cheeks fit tightly is really difficult.
I own a DF700 that I think is a great tool. But I am now wondering if, instead of buying the Seneca adapter and the DF500 domino/cutter set, I should have instead invested in the smaller Maffell doweler for those smaller size joints.