I mentioned in another thread, that YouTube certainly knows your watch history, and every other history, even when you disable/delete them. The only person you're hurting by disabling it is yourself, because you lose your access. YouTube's gonna collect it, use it, sell it, and leak it, eventually. Have fun.
For any given service, the only control you have over data collection is going to be the telemetry under a banner such as "Make YouTube Better!" "Send Crash Reports!" "Enable Debugging Data". Any sort of routine data is collected, no matter what settings you put in. I always turn my history/timeline settings up to MAX, never delete, because I know those are the settings most beneficial to me personally.
Plenty of data is collected that you aren't even aware of. Most people don't realize the intrusive nature of a modern browser or mobile device now. They can check your scrolling, dwell times, time spent on page (did you ever wonder why that annoying popup comes just at the wrong moment?) attempts to leave page, mouse movements: any twitch you make with the keyboard or mouse gets noticed and sent back to mothership.
Tell HN: https://news.ycombinator.com/item?id=37157835
CNet article: https://news.ycombinator.com/item?id=37151135
Wow, low engagements.