Memes

As far as I know (and I've looked), the only actual evidence of his fate is that, at the end of the video, he is ushered off the street by civilians in streetwear. From there, people seem to make conclusions based on an overall impression of the Chinese government as comically evil, rather than any specific or credible evidence (or indeed any evidence at all) related to this guy in particular.

Which is somewhat understandable, don't get me wrong -- no one investigates everything they hear. We try to gauge the overall picture and then, once we're convinced (rightly or wrongly), we tend to accept or reject new information on the basis of that picture. Everyone does this. I do it. That's why US propaganda is so effective. It works by sheer volume and repetition, amplified by a compliant media. Once that "comically evil Chinese government" picture is established, people will believe new details that fit the picture. Many stories collapse under scrutiny, but as long as they carry no consequences for ordinary Americans -- as opposed to, say, "Saddam has WMDs" -- skepticism spreads slowly, and meanwhile new stories are piled on top.