You are absolutely right, I completely forgot to update the page with information about the new permission!

I have just updated that page: https://rthaut.github.io/YouTubePopoutPlayer/permissions

Here is the explanation for that new "block any content" permission, taken directly from the updated page:

This extension does not block any content at all, nor does it run on any pages other than the popout player.

This is part of the big Manifest v3 changes that Chrome has pushed. The permission is "declarativeNetRequest" and is needed to set the "Referer" header for the popout player window/tab; without that header being set, many videos do not play in the popout player.

This was previously accomplished via the "webRequest" and "webRequestBlocking" permissions that allowed code to run when the network requests were being executed (similar to how ad-blockers function), but those permissions and the corresponding functionality have been removed in Chrome for Manifest v3.

This is only used for the embedded player page on the primary youtube.com domain and the alternate youtube-nocookie.com domain.