Software developer here, while I do not know everything about it, from what I observed and learned is following the case:

• NewPipe has a component called NewPipe Extractor which is also used by most other opensource YT clients like LibreTube. From what I observed, it extracts the video URL for the stream without rly loading anything else of YouTube.
• When you use YouTube in a browser, the entire YouTube page is loaded minus the content that has been blocked by Brave Shields, uBlock Origin or other utilities.

I think privacy and security wise there is not a lot if not at all a difference, as both take a best effort approach to limit YT’s ads and tracking mechanisms.

The only real difference is if you log in via e.g. Grayjay and on the website directly. Grayjay will only use your token to authenticate while necessary and not share all kinds of data with YT, while the website stores your watch history, search history, etc.

It shouldn’t be a difference, what Ublock and Brave and network based blockers such Pihole do is they have a list of domains that are not allowed to load on your system.

If they find that www(dot)adexample(dot)com is trying to load in your browser, they simply block it and the video continue.

Maybe the only different is the privacy itself that offer something like Libretube vs something like YouTube + Ublock. While using Libretube, you are only loading what is neccesary, you are not giving Google more information that you shouldn’t, and while you using YouTube in Firefox for example you are loading all the cookies, trackers and that stuff, even in private browser with maximum privacy settings and adblocker.

IMO the only real difference is using Invidious