Does it count as tracking though? What private or personal data is it? I’d also say that it’s at the very least grey area since all they’re doing is trying to prevent people from using their service in unintended ways, ie without ads.

Their obvious solution to this is make you consent to it or you can’t use YouTube.

Are you talking about on mobile? I don’t think people are hosting kodi and their content on their phones.

You don’t need to have local copies of all your media with kodi. A NAS works just fine.