That being said, this is a matter that @DataDrake and I are discussing internally and also seeing what other larger projects like Debian, that have actual lawyers at their disposal, do in response to this.
My personal opinion is that
youtube-dl provides tooling to download content from numerous websites, not just YouTube, and can be used for legitimate archival reasons where a content creator or other persons may not have access to specific backend dashboards to download the videos themselves. I don't see how this is really any different from bittorrent clients and the BitTorrent protocol, almost all of these websites are using HTTP and the MPEG-DASH protocol. Maybe a few are still holding on to HLS. But it's not that substantially different than combining the m4s segments locally.
Now, do I think it's stupid and reckless to use examples of copywritten content as technical examples to validate youtube-dl functionality (encryption signature and age protection checks), in the source repo? Absolutely. They probably only discovered it because it basically promoted the downloading of a song, which ya know the RIAA kinda goes after you for. They shot themselves in the foot over it. They could've uploaded their own videos and age protected them for testing.
Also note, I have removed URLs to forks of youtube-dl from posts on this thread. I'd rather not end up in hot water for even the potential for "promoting" this sort of circumvention.