It works, and does so seamlessly.

Absolutely fantastic!
Get this ADBLOCK for Youtube™ extension and run it in conjunction with "YouTube High Definition" and take care of several YT annoyances like it always or most times defaulting to 100% or a similar high volume every time you click a new video to watch or every time the page is loaded, plus if your Internet Provider's bandwidth is fast you can set the "Quality" menu to one of these preferred resolution choices (Highres*, 8k or 4320p, 5k or 2880p, 4k, 1440p, 1080p, 720p, 480p, 360p, 240p, 144p)
It has a square & red "HD" icon you'll see on your Browser's toolbar once installed.

Now here's the fun part, go to Youtube Music at https://music.youtube.com & use it all you want, with no ads, no junk and with awesome resolution for the videos you choose to watch!
There you go! It darn near looks and feels like Youtube Music Premium doesn't it?
That's because it's the SAME THING WITHOUT PAYING as far as I can tell!

(* = If your bandwidth starts to suffer by having the "Quality" cranked up too high, just lower it one or two settings down & see if the buffering and lag problems fix themselves, if not, lower a little bit more, you'll find YOUR sweet spot! (without any buffering, chugging or lag I'd say 98% of the time, I found that "Highres" is my setting of choice, which is the maximum setting Youtube has, it just sets you to the highest, don't use if you have issues, do what is stated above.
"Highres" doesn't get you "8k 4320p" video if it isn't recorded, encoded or otherwise uploaded to Youtube that way, if the video you're trying to watch is "HD 1440p" then this extension will choose that as it's "Highres" resolution for that particular video and the same goes for all videos.
On a side note, a great way to see STUNNING 8K videos is to search for "flyover" or "fly over" & most of the results are in awesome super 8K resolutions, or darn close to that anyhow, either way, stunning videos!

I hope I've helped someone out there a little bit, having Youtube Music Premium is great in itself, but for free with these two Firefox extensions, "ADBLOCK FOR YOUTUBE™", "YOUTUBE HIGH DEFINITION" and I believe there are Chrome versions too, not just for Firefox as I'm using.

Enjoy!

Best regards,
D from B.C.

It works
edit: not anymore
edit2: works again

As of october 27 2023 works for the updated youtube adblocker block

works