Any TV client that has an official YouTube app has been required to have DRM hardware for seven or eight years now, it's literally part of the terms for carrying it.

How does it work outside of clients, like on the browser, is it difficult for yt-dlp to impersonate a browser compare to a client?

Increasingly browsers can do it too - Edge, Chrome for Windows 11, Firefox on Windows 11 and Safari on Macs have the ability to access hardware DRM if the hardware supports it.

They will need a fallback, but reducing the resolution significantly on said fallback would solve that.