I think it’s still handing off because if the Apple TV doesn’t have internet but just intranet ( as in my case) it won’t play with airplay. I have to connect my Apple TV 3rd gen to my iPhone hotspot in order to play YT videos.Almost daily for the last 8 years I have used to AirPlay YouTube from my iPad to my ATV3 with not a problem.
Actually I do prefer to watch YouTube in my ATV3 that way, instead of using the ATV3 channel do that purpose. I find AirPlaying much more easy to use.
Yet if I’m on my intranet and mirror my iPhone to play a game it works fine.