Videos oembedded in Media throwing error

We are suddenly seeing this same error, after recent updates to File Entity, Entity, Media, etc. The patch solves the first error, but seems to introduce a new one for us:

1. Attempt to embed a Youtube video using Media browser/Web option (paste in a direct Youtube URL)

2. By default our setup is set to use "media" as the destination directory -- if this is in place we get the following error on upload:

Fatal error: Unsupported operand types in /srv/bindings/4a27d457e38b44169d67b4ad6a3fddc6/code/includes/path.inc on line 434

3. If we remove "media" as the desitnation directory and simply upload to the default public "files" folder, it works but with this PHP notice:

Notice: Uninitialized string offset: 0 in path_file_update() (line 2403 of /srv/bindings/4a27d457e38b44169d67b4ad6a3fddc6/code/sites/all/modules/file_entity/file_entity.module).

We haven't had a chance to look beyond this but will post if we can figure out a solution -- glad to know we aren't the only ones seeing this bug.

Do you have the core "Path" module enabled? That seems to be key to the second portion of this, but for reca,p and hopefully as a way to re-produce:

1. We are running the very latest DEV snapshots of all relevant modules (Media, File Entity, Entity, Ctools, etc.)

2. With no patches of any kind, with or without Path module enabled, we cannot upload a new Youtube video into Media without producing the error from OP:

The specified file oembed://http%3A//youtu.be/YJIevQNgQGw could not be copied, because the destination directory is not properly configured. This may be caused by a problem with file or directory permissions. More information is available in the system log.
EntityMalformedException: Missing bundle property on entity of type file. in entity_extract_ids() (line 7766 of /var/www/html/test/includes/common.inc).

3. When we apply the attached patch, this error goes away completely. Note that there is a competing patch here that solves the same issue:

https://www.drupal.org/node/2454823#comment-9735479

Slightly different, but either of these patches seem to solve the original error.

4. However, we then get a second set of errors, depending on whether or not the core Path module is enabled. Note that we have also disabled all other potential conflicting path modules (Pathauto, Pathologic, etc.):

Path module ENABLED

a. Media > Web -- Upload path is set by default to "media" (or whatever, it does not matter)

b. Paste Youtube URL -- File URL or media resource: http://youtu.be/rF1X12PE6PY (or whatever, it does not matter)

c. Click "Next" and it produces this error:

Fatal error: Unsupported operand types in /Users/broeker/dev/cob/includes/path.inc on line 434

If we re-attempt these same exact steps, but remove everything from the "Upload path" field, then the upload will work except it will throw this PHP notice:

Notice: Uninitialized string offset: 0 in path_file_update() (line 2403 of /srv/bindings/4a27d457e38b44169d67b4ad6a3fddc6/code/sites/all/modules/file_entity/file_entity.module).

5. To fix this, I tried your suggestion of changing isset() to !empty() on line 2401 of file_entity.module -- this fixed the PHP Notice problem.

6. In summary to upload a Youtube:

a. Apply this patch, or the linked competing patch

b. Patch file_entity.module to use !empty() instead of isset()

c. Ensure that there is nothing in the Upload path field -- it must be empty

Path module DISABLED

1. Media > Web -- Upload path is set by default to "media" (or whatever, it does not matter)

2. Paste Youtube URL -- File URL or media resource: http://youtu.be/rF1X12PE6PY (or whatever, it does not matter)

3. Click "Next" and everything is golden.

** Note that the !empty() fix needs to be applied in both cases, with or without Path to avoid PHP Notice error.

#2000934: Allow selection of which folder a file is to on the file/add form has been reverted.

So I'm confused now. After it's been reverted what do I need to do to fix this error. Do I need to apply one of these patches?

Ditto what LoneWolfPR has asked. There are two patches but neither have been committed or have been reverted. I am experiencing this issue with the latest versions - as of April 10, 2015:

File Entity 7x-2x-dev
Media 7x-2x-dev
Media Youtube 7x-2-rc5
Media Internet Sources 7x-2x-dev

Before the update the Youtube urls like this https://youtu.be/okdh-hPouHo were displaying correctly and the preview files were in the sites/default/files/media-youtube directory.

Now I'm getting the:
File /tmp/test_-videoname (C:\tmp\test_-4871_-videoname) could not be deleted because it is not a valid URI. This may be caused by improper use of file_delete() or a missing stream wrapper.

Has anyone gotten anywhere with this issue? I am running the latest git pull of everything and not getting anywhere and have some irritated customers.