In the iOS YouTube app of my phone and iPad both on iOS 9.3, I see this as a menu choice when typing in the comments field. I don't have Chinese languages enabled on my phone or iPad that I know of. What is this button for, and why am I seeing it in YouTube only?
That button is to convert Simplified Chinese to Complicated Chinese.
So you select some Simplified Chinese text like:
我喜欢吃面包 (I like to eat bread)
Tap that Chinese pop up option and it converts it to:
我喜歡吃麵包 (I like to eat bread)
Which is the Complicated Chinese version of that sentence, but still retains the same meaning.
You can do this vice versa.
If you don't use Chinese at all, you can just simply ignore it.
Some additional information. Complicated Chinese is the traditional Chinese used for thousands of years. China and Taiwan used to have it has their main language but now only Taiwan has it.
China uses Simplified Chinese to make writing simpler.
It's not very complicated to convert from one to another as there is hardly any grammatical changes. Just only the way some characters are written have been changed.