It’s more about the ability for such apps to exist. Other apps include Tachiyomi (manga reader) and similar apps that are not allowed because of the app stores terms of service.
Hopefully Apple will soon be forced to allow such apps to exist outside of their store. Freedom to install what I want is a main reason I switched back from an iPhone to a Pixel with GrapheneOS.
Some people (including me) care about software freedom. The ability to fork and redistribute software while continuing to publish any changes to the code is great.
Not using an open source license but a source available license is not something that I like to see, but it’s their right to do so. There’re enough open source YouTube frontends like NewPipe and LibreTube.
PS: What I really don’t like is them using the term open source. Open source is a well known term that’s well defined. Source available describes exactly what this app is without implying the freedoms associated with open source.