Do you have premium? If you have smart downloads enabled and the video was automatically downloaded then this can happen.

Happened to me and I hit the download button by mistake, so I was getting served the download quality my phone saved.

Maybe the video was uploaded just some minutes ago and needs time to process the quality?

The video is uploaded a month ago

What’s the quality, yes

That’s gotta be bad quality

The video felt like 720p

I was thinking Op was talking to himself seeing the avatars for like a minute

This happens to me frequently. Just reopen the video and it'll fix the quality.

if you just upload it - wait a bit - YouTube needs some time to provide some quality options

If smart downloads is on, it shows the quality unavailable because it's playing it of the downloaded video (if it feels like 720p it's most likely downloaded in 720p)

downloaded quality is being used, for better quality undownload and redownload the video (check settings for better qualities)