I'm not involved in the process so not the best person to answer but I think it boils down to: team, team, team. Not that YC assesses every team perfectly, of course, but it's the principle.
Domain, product, and so on, are relevant, but mostly for what they reveal about a team. If there's already a product with users and/or revenue, it proves that these founders a.k.a. the team is able to build a product that gets users and/or revenue, which is the kind of team YC wants to fund. For example.
What I mean to ask is: given high number of applications, how does YC generally pick within a bucket of similar applications?
Similarity based on domain, product status, etc. If there are 40 which are quite similar, what then?