Interestingly, I've found turning off your Youtube watch history has very little negatives and a couple positives.

The videos you watch aren't logged (at least knowingly). I would periodically have to clear chunks of my watch history if it took over what the algorithm was pushing towards me. Now if I want to watch something later because I can't finish it or want to revisit it, I use the watch later playlist instead of digging through my watch history.

When you turn off your watch history, Youtube doesn't recommend you videos on the homepage, saying "Your watch history is off, You can change your setting at any time to get the latest videos tailored to you". This is a little misleading, you still get "tailored videos" recommended in the related videos list while your watching a video, the difference is it uses the current video, your liked videos and who your subscribed to instead of your watch history. Since the homepage is essentially a search engine homepage now, I have a bookmark set to the subscriptions page to get recent videos from channels I'm subscribed to.

The related videos that are shown when I watch a video are mostly stuff I'm subscribed to and have in my liked videos playlist as well as being related to the video. So a lot of game, art, and vtuber related videos get pushed instead of something related to a random trending video I watched a long time ago.

You aren't completely disconnected from the algorithm though. Usually you get some videos that the algorithm picks up as being really popular, as well as some other garbage videos used as padding. For me it's usually foreign politics as the padding and random Moistcritical videos as the really popular ones. These can be phased out by being heavy handed with marking them as "Not Interested" by clicking the three dots next to the thumbnails.

You can still get recommended videos that you like by actually using the like button as it was intended. Instead of the website giving you videos based on what you watched, but didn't really like too much, you get stuff you actually care about.

Along with this, it keeps you from getting stuck in a cycle where you endlessly watch negative videos, there was a time I would watch some dumb streamer drama videos and because it was in my watch history, other videos like it would keep appearing and I would keep watching them. It's probably done this way to keep you watching videos and by extension watching ads (provided you aren't using an adblocker).