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>Downloaded videos can be played offline for up to 29 days. After that, you'll need to reconnect your device to the internet.

That sounds like DRM. The page also seems to suggest that you need to use youtube.com to watch videos, not a file on your system.

It looks like you are right, it saves offline-enabled content to a number of encrypted blobs only the official app can play.

I wouldn't now, I use yt-dlp that can also make use of YouTube cookies, since otherwise YouTube is not DRM protected like Netflix is for example.