The main problem with Youtube, and almost every other social site, is not the algorithm itself, but that the algorithm is the only way you can interact with that site. The moment you want to do something different, it just doesn't work.
Try watching the old videos of a channel you just discovered, that's 20 clicks and a lot of waiting just to get to the bottom of that endless scroll list. There is no user visible tracking of what you watched, no way to bookmark the end of that list and really nothing you can do than give up.
Don't like the over produced Youtube content and want something that gets to the point quicker? Well, use TikTok, since Youtube has exterminated that style of video quite successfully over the last decade with the help of their algorithm.
Meanwhile Shorts just feels utterly stupid, it's a broken interface with the ability to seek through the video removed. It's just annoying. The irony is that Youtube can display Shorts just like regular video, but you have to do some URL editing to do so. Most Shorts are just parts of full videos anyway, so there isn't even much point in having them. They should have called it YoutubeZap and just be time stamps into the interesting parts of videos that already exist on their site instead of this duplication of content.
Another big problem is how under utilized playlists are. They exist, but since you can't subscribe or pin them, you'll have forgotten that they exist by the time you open up Youtube again.
The algorithm itself also has some big problems, such as never being able to put multipart videos together properly. When you see a video marked with "Part 4", you'd think the other parts would show up, but they don't or when they do it often skips parts.
And of course the algorithm filter bubbles you to an extreme. You get exactly the recommendations for the videos you just watched. It doesn't really try to broaden your horizon. It ignores your subscriptions. And really just doesn't have a way to change directions. The only thing that worked for me was to create different browser profiles with different accounts and switch between them, that keeps recommendations for different topics apart. And whenever I click a wrong video I have to go into the history and clean it up, or the profile is turned into a mess for weeks.
As watch-time optimizer and ad delivery machine the algorithm does a good job. But it really feels like the algorithm is using you, more than the other way around.