Depends how far they're going to take it. If they'll focus on people with a YouTube account and threaten to block their YouTube/Google account, it's one thing. You'll be able to work around it by using incognito mode (assuming you trust they don't spy on you in incognito mode...) or a browser where you're not logged in, or NewPipe etc.
If they threaten to block people who aren't logged in (by IP and by the fact they already spy on your phone and know your Google account) then it's another thing and nothing will be able to bypass it. They would burn a lot of bridges by doing that and expose themselves to some huge fallout and scrutiny about privacy, but you'd have no choice but to watch ads or not use YouTube.