I don't think the question, as asked, reflects exactly what M. says at that particular point in the video:
He basically says "we can't do all this stuff in Europe and we need to get out of Europe and let Europeans take care of their own defense."
I want to make crystal clear the word NATO is not used in that particular segment, only Europe.
Now, let's run with that for a second. Most of NATO's European members could, realistically, if they chose to, take care of security on their continent (i.e. contain Russia). But they cannot act in Asia, as they don't have the force projection capability to do so and very limited navies.
France and the UK are partial exceptions.
If China indeed needs containment then it would make sense for the US to reapportion its military forces to the Pacific while remaining in NATO to "keep the Europeans" onboard.
And, if China needs to be contained, then it would make sense for the West - both the US and Europe - to uncouple from it as much as possible economically. Or at least hold out the possibility of doing that in negotiations with China - I think we should very much aim to avoid Cold War 2.
The reverse, buying lots of stuff from a hostile power, can have its downside, as we are seeing with Putin's Russia.
Obama's Pivot to the Pacific is already a step in that direction. The link I chose isn't particularly supportive of that initiative, but it doesn't need to be, it's just dissecting Obama's approach which was pretty much a toned-down version of M's suggestion here. I tend to be more sympathetic to the pivot myself, but none of it requires leaving NATO.
I did not watch the rest of that one hour video, nor do I intend to. Just answering this question with regards to what was asked in it, from that particular segment.
p.s. Unlike Russia, China is successful in its own right and it may be possible to bring relations to a soft landing. But, also unlike Russia, China, based on its economy and technology, has a tremendous potential as a military adversary in the mid/long term, say on a 15-30 year horizon. Which makes M's musings not entirely unproductive even if they fly in the face of common views right now.
p.p.s. What ws2 says in the comments bears repeating: I would have thought that the one sure way of allowing the China "beast" to achieve world pre-eminence would be for a split to arise in the two major western power blocks. And that's what Trump got so massively wrong.
p.p.p.s. Not endorsing M's claims on this subject as a whole. Reading an older paper of his on the subject it seems to over-simplify intra-European dynamics: "Germany will aim to dominate cuz Germany". So does a recent article in the Economist: "Russia's invasion was caused by the West": A thought provoking article, certainly, but also equally one-sided. Still not convinced by the framing of this question.