Hmm Youtube says that video does not exist.
Anyway it is a Hall effect sensor that measures current flow. The control system can use that information to determine the state of charge of the battery. If the battery charge gets too low, the system starts shedding load (turning things off) to try to get the battery charged to a higher state.
So if you bypass the hall effect sensor by connecting something to the minus terminal of the battery AND bypass the ring (meaning you don't put the wire thru it) the system will not measure the state of charge properly. As far as the admonition to not connect anything to the negative terminal but to some other ground, that just insures that the system will account properly for the accessory.
So like I said, You can connect to the terminal if you pass the wire thru the ring. If that bothers you, don't do it. Just connect it to a known good ground. Like the other end of the battery ground wire.
The OP is having issues with his lights not working and we here who are actually trying to help him are doubting his ground. Probably from experience ourselves.
As for the harness length, any wire on that harness can be lengthened as necessary.
As for HID's yes I have them on my truck and they work great.
As for my qualifications, I graduated with an Electrical Engineering degree in 1979 and have been working for an electric utility for about 35 years mostly in metering.
Hall effect devices have been around a long time. I first learned about them in about 1978 when I worked for a summer as an electronics technician for an oilfield supply business.
Oh look the HID's are in my signature VVVVV