But if you try to download in significant volume, their systems know it's automated and probably have signatures specifically for yt-dlp.
I think it's a bit of an escape hatch: they know they can't close the hole (after all, there is always the "analogue hole", or now AI doing browser control); and probably prefer leaving a small monitored and rate-limited door than trying to patch everything.
See: Google changing their sponsored link DOM/CSS/classes matchers every (few weeks - few months) to break ad blocker lists, but they're certainly capable/smart enough to do it daily or hourly, etc.
They likely want to block alt clients that strip adverts while allowing the small amount of downloading to still work.
I use yt-dlp to download sporadically some YouTube clips and it works fine.
However, once I attempted to download a complete YouTube list of clips, with a total size of several tens of GB. Towards the end of the list, after a couple of hours or so, the download was interrupted.
Then my IP address was completely banned for YouTube, regardless of the browser used. The ban lasted for a couple of weeks.
Now, used only for infrequently downloading single clips, yt-dlp works again fine.
Well, the big G is not going to sit around and watch it being scraped
Obviously, the YouTube team is aware of yt-dlp, and with Google's engineering density, a small team can completely block it & win in the cat-n-mouse game against community volunteers that make all their code public.