Afaik you are wrong. Idk about Invidious but Piped proxies all traffic through the server so it’s almost like a regular proxy that people used before VPN was a thing. It stores user data if you sign up but it is not necessary and if you don’t do it, the data will be stored locally with an ability to make a JSON backup of it.
I’ve been talking about the case that you’re logged in with a Piped account, which makes your subscriptions and playlists become stored at Piped’s server.
Piped does more than just proxying at its backend, the only thing that you could really call to become proxied are thumbnails and video playback.
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