Probably the latter. yt-dlp can be detected and it yields account / IP bans, it seems. They've been going back and forth around the blocks for weeks but only by claiming to be different devices, each time they do the checks are added for the new client and they have to move onto the next. There's a finite number of those.
Here's a comment from Invidious on the matter:
https://github.com/iv-org/invidious/issues/4734#issuecomment...