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Update: after nearly two months, a new OS version 7.6.1 for Apple TV 3 just arrived. Sadly, the YouTube failure is not fixed. I hope nothing new is broken...
I got an email from Apple support today asking me to try the new Apple TV 3rd Generation update reputed to fix the YouTube bug. I did, and it seemingly does. This also means the handy pause menu works again.
I'm not sure which surprised me more, that the fix finally arrived after "only" three months, or that Apple bothered to let me know. Whatever.
I'm still not willing to trust my iPad to 14.X, when 13.7 does everything I want without issues.