It's technically a personal video-watching app, not a Youtube app, which you're supposed to link with your own personal video server, but the server APIs it is compatible with are the same APIs that are exposed by Invidious and Newpipe instances. This is not a coincidence.
I'm sure Apple is going to delist it from the App Store at some point (App Store guidelines are just that, guidelines, and there's no getting around them with a weird loophole like you can do with actual laws), but it works for now.