It's not a battery issue as this and the other 3s packs I have work just fine on my other 3 quads. 385mm with SS 1250kv and Avroto 770kv on 8" and 10" prop, Disco 550mm with Avroto 770kv.
The pack being used in the video is a Venom 3200Mah 20c pack. I also tested a Floureon 3000Mah 30c, Venom 5000Mah 35c and Glacier 4000Mah 30c pack with the same results.
Your correct in your thinking it "Should hover" at about 1/3 throttle but even small throttle inputs causes it to wobble and drop.
If the other video ever gets posted you will see the difference on 4s with the same setup.
I will try posting it here?
https://youtu.be/1wCFHoCkmi4