XeNTaX

VGMToolbox isn't extracting the video properly from it (I followed a YouTube tutorial that's unfortunately from 2 years ago), any other suggestions to get the video file out of it correctly?
(Hex editor says the video within is supposed to be AVI format)

Sample file for analysis: https://www.sendspace.com/file/j9zsos

So...does nobody know how to properly extract the video from the USM file I linked?

Use medianoche. It's scaleform's "official" video converter. You can find it on various forums.

Thanks, I'll give that a try!

where I can find medianoche?

I couldn't extract video files from usm (Tekken 7 PC), but could extract from PS4 version easily with vgmtoolbox, they are not encrypted as PC version.

Tekken 7 (PC) USM videos are encrypted. You need CRID Demux Tool (crid_mod) and a proper XOR key to demux data.
Go to http://wiki.xentax.com/index.php/USM_Video for more info.

Btw, medianoche.exe is part of the Scaleform VideoEncoder v4.0, which is available to download from the internet.