Its like me blocking youtube on hosts file or even on Pihole or related manually. I realize blocking youtube BREAKS a lot of things in the network.
The only reason I can think of is to sync user session cookies across domains?
I do believe it works if you block just the youtube.com domain and not *.youtube.com
In additional to youtube.com, in many cases, they redirect to many countries specific domain as well (e.g google.co.jp)
Youtube is common enough that they want to login on the same flow