Classically - the "Gear" has been a symbol of something which is configurable since GUI Operating Systems have been around. I never understood really why they ( the early Programmers ) chose that symbol in particular - but they did, and it's nothing new. They been using it since at least early 1990's.
Second point is that by having the configuration optios of the default quality and eg... "I have a slow Connection...." integrated into that one setting on the video player, means I don't have to go to my user profile = Playback Settings and adjust it there - that is provided that both interfaces work correctly for my account, my browser - an for my account and my browser both of them do. So for me - I can set everything directly from the video player. Though I understand that one or both interfaces don't work correctly for everyone. I can only speak for myself.
Third point - I agree. My parents don't know the first thing about YouTube video player. They didn't even notice when it got changed from gray to black. They just click the link to the video that their friends send them - and they are happy to just watch the video. They wouldn't know any difference between a number like 360 or 720 or a gear... they just watch the video and they go do something else.
So if someone already knows what the gear means - is it that big of a deal to just use the thing and feel like they know some Top Secret tricks that their parents don't know?