Apple rejected the update. The reason was not the bugfix, they rejected the App because of a feature that was available for years in iCab Mobile and which is also available in hundreds of other Apps in the AppStore. They rejected the App because it is able to download videos from YouTube so you can watch the videos offline.
This time Apple did not complain about the features of the App, they rejected the App because I mentioned in the AppStore description that I had to block downloads from YouTube… And as the reason for this, they cited item 3.3 from the AppStore guidelines: “Apps with descriptions not relevant to the application content and functionality will be rejected”.
Besides, there are millions of videos on Youtube which are under the creative commons license CC-By which explicitly allows to share, mix, redistribute, there are also laws like “fair use” (US) and “private use” (Germany) and similar laws in other countries, which do allow users to use even copyright-protected material under certain conditions (like for educational purposes, for your own private usage). So there’s nothing illegal in downloading content per se, at least if the content itself is provided legally on the web site.
There are Apps released to the AppStore even after Apple has rejected my App, which not only have the same feature (Downloading youtube videos for offline viewing), but which also explicitly advertise this feature in the description and in the screenshots for the AppStore. Apple allows these Apps to do something which my App is not allowed to do anymore.