Yeah, but there is a gaping difference between content for kids (i.e. 12 and under) and content for teenagers.

Most teenage-appropriate content would be enjoyed by adults too (e.g. lots of how-tos, educational content, music, entertainment, etc.) Most adults are not going to be into watching Blues Clues or whatever, which is why YouTube doesn't have to worry about cannibalizing more profitable content/algorithms for adults due to the existence of YouTube Kids.

It doesn't meet requirement #4 (Filter out age inappropriate content). You can find many articles and videos, over the years, about all the inappropriate stuff making it into YouTube Kids.