What is this kind of distortion called?
Your image with increased contrast:

Figure 1. Denis Kulagin's figure with gain applied.

That is kind of color banding due to quantization. Quantization errors can be made worse by repeated decoding and encoding, because quantization levels and things that are quantized may not match between the encodings. In video encoding, it is not directly the pixels that are quantized, but things like discrete cosine transform coefficients for 8x8 or so blocks of chroma and luma values of pixels. JPEG images compressed with a low quality setting exhibit color banding for the same reasons:



Figure 2. Top: 60 KB PNG file, Bottom: 2 KB JPEG file

Also color space conversions may introduce quantization errors and banding. For example sRGB and Rec. 709 transfer characteristics differ at worst by about a factor of two at low intensities.