Watching a YouTube video and downloading a YouTube video are the same thing. They are indistinguishable. You can not watch the video without downloading it. Just normally you dont keep the file but each part of the video is discarded a few seconds after you watched it. I dont think YouTube ever went after users who watched pirated content, they only ban the channels that upload it.

Your ISP or law enforcement only see you are watching YouTube. They dont know which video and they dont know if you save it or not.

It becomes a whole different thing when you yourself are a creator of any kind. Sure you can retorrent TBs of movies. But you can’t retake that video from 3 years ago. I have about 2 TB of photos I took. I classify that as media.