Is user data stored on air-gapped computers? I’d be very surprised if it was. Offline doesn’t necessarily mean innaccessible, and in fact user data must be accessible as a database on the company’s intranet in some way in order to perform the search and removal efforts. Plus there’s the (albeit small) possibility of rogue employees deciding to do something nefarious with their personal access to that info.
I’ve never had NewPipe present me with a sign in prompt or any bot challenges, that’s a very strange scenario to be facing.