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This looks very interesting. I looked at the "add-ons" page for Firefox and noticed under permissions it said "Access your data for all websites". Why would it need to access all websites? Why not just when you access YouTube?
It could be so that it works for embedded videos on other websites
This add-on may also ask to: Access your data for all websites
Sponsor Block works on front ends like Invidious.
Might just be how the plugin API in Firefox works. I haven't looked, but maybe plugins don't specify that they access a specific site, just that they need site access.