They're trying to shut down all their possible COPPA liabilities because they can get incredibly expensive very quickly so any data on made for kids content they're treating like it's data on kids. Also skimming the FTC's FAQ it sounds like if you're serving a web page targeted at children you have to do a lot more so google having channels aimed at kids puts them under the stricter standards about ensuring kids data doesn't get tracked.

It seems as if the default assumption for all kids content is the "kid" did it, and hence assumed they also made the playlist. Perhaps features will be added at a later date to re-enable features such as playlists with default implicit parental consent.

I rather like the hard handed approach as a parent (who can be both lazy and diligent) as I think it reinforces good parental control of video content.

This will force lots of behavior changes for both consumers and producers. The key will be how they handle the suggested videos, which may have unintended negative consequences, as I am sure the UX will still be based on generated maximum ad dollars, targeted or not, and not "healthy" video viewing.