I have the CD version installed - I might try to get to this point later and see if it's possible to reproduce the issue. There might even be a way to fix it.
Edit: yes, it plays in my version. Here's a recording:
https://youtu.be/3S61ig2DfZc Edit 2: Forgot to mention that I'm using GrayFace MM8 Patch v1.4
Edit 3: Can confirm that after I installed the gog.com edition and copied the same savegame over, the cutscene does not play in that version. Seems like a bug in the gog.com version.
Edit 4: I took a look at the internal video files using St0rmCat's viewer and there doesn't seem to be any issue with the actual video file (dragonsrevenge.bik inside Magicdod.vid). It's most probably a bug introduced through one of the other modifications that gog.com has made to make MM8 work on modern machines. I'll raise a support request for it.