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Mine was working finally and then it went away after viewing in PIP for some time. An alert of some kind popped up to ask if I'd like to purchase the premium level to keep watching YouTube vids in PIP. I declined so back to no PIP.
 
This literally just started working for me about five minutes before this post. Didn’t seem to happen with an app update, just turned on server side or something. Better late than never!
 
Yes, mine has now consistently worked on both the iPhone and iPad for about a week now.
 
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