I have a feeling, despite Google's communications, this is all an attempt to thwart the numerous ad-free YouTube apps.
Another reason it should have been broken apart years ago. It's laughable that the biggest ad company in the world owns the largest video site in the world, largest browser in the world, largest search engine in the world, and largest mobile OS in the world.
If google push too hard, someone will make a "youtube mirror" - ie. a complete copy of youtube at a different domain.
The actual data could be hosted p2p across all the users devices, and any missing data retrieved one-time-only from real youtube servers.
NewPipe (FOSS available on F-Droid) is nice alternative to ads-infested YouTube. I disabled YouTube and YouTube Music apps on my mobile, and I use NewPipe instead. You can even download YT videos or audio from YT videos using it.