I'm not really seeing what you're speaking of. Can you post a cropped-in image of the original footage? YouTube is going to include so much more compression on top of the original captured compression.
Also, the G40 would only be giving you 8-bit 4:2:0 footage. So stair-stepping/banding (is that what you're seeing?) will be common.
What I see looks normal. That's lens flare / glare.
If you believe this is abnormal. I would reset the camera to defaults and retest. I don't believe it will change anything, but you can try it to confirm.
This is extremely frustrating. I'm beginning to think that something in the camera is starting to fail.
I have changed all of the setting in both manual and auto modes and I have formatted the SD cards but I cannot get the camera to record in low light like it did up until two months ago. Can anyone offer further knowledge or assistance?
This two images show what the camera used to capture. (Refer to the flare from the orange beacons).
In contrast to the orange lights in this image which have the sqaure/pixelation effect around them.