Huge amount of users of youtube are literally babies, they don't know how to read or write so they don't sign in.
I'm starting to also suspect the trend of YTs algorithm insisting on recommending videos you've already watched is also a decision from this huge baby user base.
Sounds pretty bad for ad-revenue....
I hate to say this because I'd be affected but that's the math I would expect them to use. The only counter argument I can think of, why they might care to keep freeloaders there, is the network effect
Edit: I did some searching. In addition to that, the only relevant news I could find were about Google testing locking the 4K (2160p) resolution behind the Premium doors, which they ceased doing.
But it seems I'm mistaken [1].
[1] https://www.theverge.com/2023/2/23/23612647/youtube-1080p-pr...