The business model is based on attention
YouTube makes money through advertising. More attention = more ads = more money. The algorithm is not there to do something good for your child.
YouTube is not a children's platform. It's an advertising platform optimized for maximum usage time. For adults that's a trade-off. For children it's a problem.

The risks
YouTube makes money through advertising. More attention = more ads = more money. The algorithm is not there to do something good for your child.
YouTube has over 800 million videos. Manual review is impossible. The tagging system is flawed — and regularly abused.
Children cannot reliably distinguish ads from content. YouTube shows ads for toys, food, and games directly to your child.
Videos have comments and links. Here your child can encounter content you would never have approved.
Autoplay, recommendations, notifications — all of it was designed to keep viewers watching. Children are especially susceptible.
A better frame
Many YouTube videos are wonderful. But children need a protected frame where only approved content is visible and platform mechanics do not set the pace.

Tubsy
You don't have to block YouTube completely. With Tubsy your child gets the best of YouTube — the great content — without being exposed to the worst case.