Apparently Apple shipped an "update" that partially broke the Youtube app "Pause" feature [1], Apple did not want to revert the patch and decided to wait on Google fixing the Youtube app [1], finally 4 months later apple fixed the issue [1], one month later Google announces that it discontinues the App, 3 months later the app is discontinued.
If you downgrade your Apple TV today, the youtube app still works (I did that a couple of times when it stopped working, but the Apple TV would update itself overnight... until I gave up..).
I bought an Apple TV mainly because it was advertised as being able to play youtube. Apple introduced an update that broke the Youtube App.
I can't really blame Google here. Apple breaks their app, Apple didn't want to fix it, Google got all the burn from users, fixing the App is probably out of their hands if this was a bug introduced by Apple, ... probably not worth it for them.
Either way, I bought this device because it supported Youtube, and now it doesn't because Apple introduced an update that broke youtube.
AFAICT this is all Apple's fault and I wish we would have an EU law that would prevent hardware manufacturers from shipping updates that break their products so that customers are forced to buy new ones.