Getting DMCA'd doesn't mean anything more than somebody submitted a letter saying "I believe this content infringes my copyright, please take it down.". It does not establish guilt.

Just because the RIAA cries foul doesn't mean there is actually anything wrong here. Piracy is illegal, but youtube-dl is not a piracy tool, just like VHS recorders were not piracy tools. Making personal copies of videos is absolutely legal, and seems to be the prominent way to use youtube-dl (Why else would you use it? The content is already available for free on youtube itself!).

So what you should call youtube-dl is "Something the RIAA doesn't like", basically.

The RIAA falsely claims youtube-dl is a tool for piracy. This is not reality. Accepting the RIAA's premise is problematic.

The right words here are not "piracy" or "illegal," but it is not clear what statement you are trying to make. I can't recommend any better words without additional context.

Maybe “arguably illegal”? The RIAA’s argument is that youtube-dl is a tool for circumventing copyright protection, which is related to the concept of piracy or copyright infringement, but prohibited by different laws. Marketing a circumvention tool can be illegal even if there are ways to use it that don’t infringe copyright. https://en.wikipedia.org/wiki/Anti-circumvention

I think the word you are looking for is "allegation."