Yes, a lot of road money comes from state/federal budgets, not local. It actually causes many problems. Residents don't want a freeway through their town but guess who makes those decision?
Not really, I think roads are a convenient example but the same dynamic described (cities getting out over their skis through cheap-in-the-short term development and debt) can be seen playing out for other types of expenses. The next highest costs up that list, hospitals and education, are often also financed through debt, expensive to maintain over a long time horizon, and essential to growing the tax base. This seems totally cromulent with the basic "growth addiction" framework to me.
More roads means more sewage, power, water, gas, waste removal, snow removal, and fiber internet lines. Living spaced out also probably adds other costs like more administrative staff.
It mentions in the video that most money for road initial construction comes from State/Federal. Thus the true ongoing costs are masked and so it continues.