Vinegar is a Safari extension that replaces the YouTube player with a minimal HTML video tag.

It removes ads, restores picture-in-picture, and keeps videos playing in the background.

Note: The "can read information from webpages" text in the permission section is just unfortunate wording. Vinegar needs access to the web page to find the YouTube player and replace it. It's not doing anything creepy!

(By the way, check out Vinegar's companion app, Baking Soda. It's basically a less powerful version of Vinegar, but it works on all websites other than YouTube.)