Let’s not confuse two different things. Invidious and Pipes is a front-end, like you said. It doesn’t work well, because it isn’t really integrated with youtube. It acts like a proxy for the service.
yt-dlp on the other hand is a video downloader. Pretty much the best I’ve seen, most compatible not only with youtube, but with internet videos in general. When you’re using yt-dlp it’s like buffering whole video at once and saving it to a file. The program fetches every element of selected video and saves it to hard drive.
With that out of the way, define ‘track users’.
When you download a video, youtube only knows that you have opened that video and fetched a lot of data from the site (during the download). They don’t have analytics about how you are watching the video, how fast you click, how interested you are. That’s a win for me. Enough to use yt-dlp on daily basis. Not to mention I don’t have to deal with poor buffering that youtube is slowing down if you’re a free user.
When you download a video and watch it through players like VLC or MPC-HC, it’s local. If you care about privacy you can always disable internet access for them in your firewall.
Can youtube fingerprint users with yt-dlp? As far as I know, not really. Fingerprinting works mostly through your browser - with the usage of JavaScript, cookies, and browser settings. I may be wrong, but yt-dlp communicates in a much simpler way with for example (probably) HTTPS requests that carry much less data.
In any case, it is still better than using official Youtube website. Youtube makes the most money on analytics and ads. What videos you picked next, what is your attention span at certain points in the video. Everything is tracked, including your movement and its speed. Disabling Javascript can help, but it breaks most of the websites. I’m not even sure if youtube works without JS today. Ublocks won’t really help with that, because you have to communicate with the site in some way. And they’re using that to send your data as well.