I use Musi on iOS. Ability to play in the background, save playlists locally, no YouTube ads (just ads on screen in the app while music plays in the background, for non-paid versions), and no link to your YouTube account.
I see that in the app privacy report, but it doesn’t ask for location permission. Not really sure what to think. Perhaps it’s just tracking/logging your IP’s geo location and that alone is enough to require disclosure?
https://apps.apple.com/us/app/musi-simple-music-streaming/id...