Simple, it means that if the browser would decide to force YouTube into allowing PIP, that would be the browsers legal (and moral right).

Additionally, there’s a precedent that users want to be able to control what a site does, and are willing to take extra steps to achieve this, so a browser should implement such functionality ideally in the first place.

There are already numerous examples where browsers intervene to stop user-hostile pages. The reason pop-up ads largely don't exist any more is because browsers intervened to kill them.

Exactly, and the same should happen here. Users should be able to force PiP.