Solved thanks to @Topaco's comments. Here is the updated code with padding disabled for intermediate chunks and previous block IV usage.

public static int ServeVideoChunk(Stream encryptedStream, Stream outputStream, long offset, int chunk)
{
    using var aes = Aes.Create();
    aes.Mode = CipherMode.CBC;
    aes.Padding = PaddingMode.PKCS7;
    aes.Key = Key; // Predefined key (128 bits)
    var blockSize = aes.BlockSize / 8; // 16 bytes


    // Seek one block before the offset if possible to get the IV
    var seekPosition = Math.Max(0, offset - blockSize);
    encryptedStream.Seek(seekPosition, SeekOrigin.Begin);

    if (seekPosition <= 0)
    {
        aes.IV = Iv; // Predefined initialization vector (128 bits)
    }
    else
    {
        var iv = new byte[blockSize];
        encryptedStream.Read(iv, 0, blockSize);
        aes.IV = iv;
    }

    // Remaining ciphertext to decrypt
    var delta = encryptedStream.Length - offset;

    // EOF
    if (chunk > delta)
    {
        // The delta is supposed to already be block aligned
        chunk = (int)delta;
    }
    else
    {
        // Disable padding for intermediate chunks
        aes.Padding = PaddingMode.None;
    }

    using var cryptoStream = new CryptoStream(encryptedStream, aes.CreateDecryptor(), CryptoStreamMode.Read);

    var buffer = new byte[chunk];
    cryptoStream.Read(buffer, 0, chunk);
    outputStream.Write(buffer, 0, chunk);

    return chunk;
}