YT non-premium here, it's been working alright for me and even recovered from opening another video link over top of the PiP video. It paused and restarted after closing the competing video without issue. In my experience it's just a buggy feature sometimes regardless of OS version.
this post was submitted on 22 Jun 2023
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I’ve just tried it and it’s worked fine for me. Although I did have to restart the app. The YouTube apps PIP has always been really irritating in my experience. Sometimes it just refuses to work unless you close and reopen the app