@cnx >given how hls makes it possible to inject ads to the video stream without reencoding anything, yt-dlp still working is at the mercy of our alphabet overlords
With HLS, there is a subtle change in video stream with an ad changeover and yt-dlp simply doesn't load such streams.

Alphabet could probably inject ads in a way that's not programmatically detectable with enough work - but it seems they haven't done that as the only thing that would happen would be SponsorBlock being included and enabled by default across all installs.