I have not delved into anything for Week 3 yet, but he seemed to be taking the perspective (in Week 2) of the scales being applicable to the underlying chord being played (without regard to the chord progression). My take on what was presented with this is that the four dominant 7th chord scales are applied to the underlying chord only. Again, I have not done anything with Week 3 where it seems he explains this further, but I
assume the Lydian b7 scale is "most applicable" to the dim7 chord (so 4 of the notes in that scale match the chord notes played).
For the Altered scale, he mentioned in the videos that the 5th is sort of an optional note, since the 5th is always acceptable to the root note of the chord (after he said that I was scratching my head as to why it is not included, since I have never seen those three dominant 7th scales before).