[Should Block Youtube Ads and more, everything set up according to documentation and official guides (also checked manually if clients point to pihole as dns, which they are)]
[No blocking of YT ads (not sure about others ads but pretty sure there is also a lot of ads not being blocked, using default adblockers in browsers so hard to determine)]
AFAIK Youtube serves his ads differently, Pihole won't work (and any others url/DNS based blocker won't work (or not enough) btw)
For Youtube, just install ublock (free open-source software alternative to adblock)
to check if your pihole is working 
From your client you can check with
nslookup domain.com
It's should show your pihole IP.
After try a domain that you sure you blocked like Google analytics for instance : analytics.google.com
do as follow :
ping -4 analytics.google.com
is should also show you pihole IP
(or that : )
ah ok then maybe it is just youtube, I installed pihole to block youtube ads on firetv and mobile devices, my other clients already use adblockers. Then I guess it works.
That is not the expected behavior. YouTube serves ads from the same domains as the content. Long running thread here.