Vanced didn't redistribute a modified version of the Youtube app, they distributed a "manager" app which downloaded the official app's APKs and applied the patches at runtime. (edit: actually, I'm not 100% sure of that, since I've always used a rooted version which does apply patches at runtime, but I'm unsure about non-rooted.)

They were taken down for using a similar enough logo to Youtube that Google lawyered them into stopping that way, not for any kind of infringement in terms of software.