Imagine that you replace the block in the video with a happy or sad ball identical to the one used as a pendulum, so that the sad ball strikes a sad ball and the happy ball strikes a happy ball. the target balls are free to move, and all the balls have the same mass. in the collision between the sad balls, how much of the balls' kinetic energy is dissipated?

The sad ball does not rebound after it strikes the block. This means that the collision is inelastic. If two sad balls collide with each other, we can assume completely inelastic collision. Since momentum is conserved, the kinetic energy during the collision would be twice that of each of the ball's, half of the kinetic energy of each ball will be dissipated.