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.
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.
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.