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Well I know YouTube collects a lot of my data from what content I played to when and where I played but my question is what data does YouTube collect when I have paused watch and search history?

I am noticing from last some days that the kind of videos it shows me on homepage are sometimes similar to what I was watching for last 1 to 2 hours. Not all but a few like that which I had never seen. Every time it is not coincident.

I just want to know, is YouTube still collecting my data? And also I knew from Google that YouTube collect the data of content played on a specific device. Any more does YouTube collect?

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YouTube continues to collect your data also disabling watch and search history, but it doesn't collect and save the data to your account and you can't view viewed videos history.
To "clear" YouTube suggested videos, now, you need to clear your browser cache (site saved data), or, if you don't want be tracked from the beginning, you need to use your browser Incognito Mode.

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