The Apple TV 4K hasn’t really been doing what users expected, not when YouTube is still finding it difficult to stream beyond 1080p on the media hub. When tvOS 14 arrives, all of that will be possible and more.
As 9to5Mac said, Apple has personally assured that the new release will play YouTube videos in “full 4K.” Although it’s not certain what caused the end to the years-long impasse. Effort is currently being made to reach both Apple and Google for comment on this issue, but it likely boils down to a change in video formats.
For a while now, YouTube has taken to streaming 4K videos using its open VP9 codec. Probably, because many device makers have supported it, but Apple has balked at using the format (which has its share of patent disputes) in favor of technology like HEVC.
YouTube 4K support on the Apple TV would be needing one side to adopt the other’s preferred video technology. It may also just be a matter of who blinked first. We are waiting to see this promise hit down.