They do that because it increases “engagement”, not because they care about the user’s experience with the subtitles.

I did that (distracting subtitles) on one of my videos and it had a very negative response. I won't do it again, but I was puzzled because I find it much nicer than the traditional subtitle format personally. It's easier for my brain to focus on. (And no one in my test audience minded.)

Also some social media platforms don't offer subtitle functionality, so burned-in is the only way if you want to serve your content to people that require subtitles or refuse to unmute their phones while they watch from their toilet.