This has been happening for quite a while, and it's bothering on my low-speed connection.
As you probably know, the YouTube video player caches the loaded portions of the video so one can seek to any previously-loaded part of the video without re-downloading it.
When viewing a video and the playback stops in order for the player to buffer more of the video, I usually go back to a previous already-downloaded point (less boring than staring at the throbber).
After I click on the orange area (see the screenshot above), the player seems to discard the cached file and start re-downloading the video starting at the specified point.
Why is this happening? And is there a workaround? I tried using the experimental HTML5 player; it showed the same issue.
Any ideas/insights will be extremely appreciated.