Because their algorithm is pretty damn good at recommending relevant stuff. For example, titanfall 2 got revived and I found a lot of small youtubers (<20k subs) making some incredibly good content through it. The secret is to click "not interested" on all the clickbait crap often enough and at some point it'll learn.

Though I do use on an android TV and block out crap like shorts altogether because google's youtube app is unusable.

I kind of like the recommendations that populate aligned with my sub interests, basically

Only thing I can think of is getting notified for new videos from youtubers you’re subscribed to and the convenience of saving the play position when you don’t finish a video

Like most things, it's their recommendation engine that is actually pretty good. For as much as people complain about "the algorithm", it's useful enough that it surfaces unknown people constantly for me, and suggests things that I am interested in watching (metalworking videos, welding, machining, 3d printing, godot programming, etc.) Without an account you just get... normie bullshit clickbait.

For “favorites” I just use my browsers bookmarks

They don't work over multiple devices though, unless you have an account for your browser I guess.