Shwe Eain Si was stripped of her Miss Grand Myanmar title earlier this week.
While pageant organisers said she had breached her contract, she alleged the move was linked to her comments on a crisis that has curdled religious tensions across Myanmar.
In the video, which was interspersed with gruesome photos of mutilated bodies, Shwe Eain Si expressed a view widely held among the Myanmar public that the Rohingya militants have led a "media campaign" to trick the world into thinking "they are the oppressed".
She was referring to the humanitarian crisis in Rakhine state, where an army crackdown on the militants has sent more than half a million Rohingya civilians fleeing for Bangladesh since August 25.
While the globe has looked on with horror as Rohingya refugees pour into Bangladesh, sharing stories of atrocities at the hands of soldiers and Buddhist mobs, there is little sympathy for the group inside Myanmar.
The intense global pressure has sparked a siege mentality inside Myanmar, which has oppressed the Muslim minority for years and where Islamophobic sentiment has recently surged.
On Wednesday, Miss Universe Myanmar denied that the reason it punished the beauty queen was for her video and even offered some praise for the clip, which made no mention of the Rohingya exodus.
"The decision of Miss Universe Myanmar organisation regarding Shwe Eain Si was not related at all with the Rakhine video," the company said in a Facebook post.
It added: "Although the video file posted now is good, it would be better if it was filmed more completely."
The firm's original statement said Shwe Eain Si had been stripped of her title for breaking a number of rules.
In a lengthy Facebook post on Tuesday, the model denied breach of contract and defended her video as an effort by "a citizen of this country to use her fame to speak out the truth for her nation".
The UN has accused Myanmar's army of using its crackdown on the militants to systematically purge the Rohingya from its borders -- a charge Myanmar authorities have staunchly denied.
Shwe Eain Si has been stripped of her crown as Miss Grand Myanmar. Source: Facebook
Many, including the government, refuse to recognise the Rohingya as a distinct ethnic group, instead calling them "Muslims" or "Bengalis" -- shorthand for illegal migrants from Bangladesh.
Ethnic tensions have been kindled over the years by the army and radical Buddhist monks, who have spread fears of an Islamic takeover despite Muslims making up less than five percent of the population.
It is not the first time Myanmar's nascent beauty queen scene has been rocked by drama.
Earlier this year a prominent transgender pageant winner was detained after a famous actress sued her for defamation over insults posted on a popular celebrity gossip page.
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