Well... TBH, not exactly.
I did see a demo of the CD32 MPG card, and that "perfect" playback but...
1) It did not have the colour definition, or HD range, or the pixel fideliy of the clip, using the AA chipsept like all CD32s.
2) The resolution was not as good. I'd estimate one quarter to a ninth of res of the video you posted.
3) The sound was stereo 16 bit audio, but I think the dev kind of faked that by having a separate audio track on the CD, rather than making any attempt to compress it or decompress. In my opinion, anyway, it could have been genuine encoded audio, but I noticed how the drive kept accessing, and the CD usage seemed excessive, for the length of that clip.
Bohemian Rhapsody by Queen, as I remember. 576 lines at most, probably half of that. Low Horizontal resolution. Seemed HAM8 mode.