(A) seems applicable to me. It is obvious that the primary purpose of youtube-dl is to download videos from YouTube. It is also obvious that most videos on YouTube are copyrighted, and the absence of a ‘download’ button protects the copyright holder’s right to prevent viewers from redistributing the videos. The contentious part is whether not YouTube has “effective” anti-downloading controls that youtube-dl “circumvents.” The fact that it needs to be continually updated to defeat attempts at blocking it suggests that this is a fair characterisation.
The conspicuous lack of a feature is not an active measure to be circumvented. Also, no one says you need to consume HTTP payloads with a traditional browser, no matter how much the rest of the worldwants to think that the Internet is all about the WWW.
Finally, there is most definitely gobs of YouTube public domain or CC-by-SA. Copyright owners who reserve all rights are not the center of the Universe.