Donovan gave that assessment of "Yellow Submarine" in an interview he had in 2014 with Howard Stern and he reiterated it in 2016 when he toured the US and Canada.
In the interview with Stern--on Youtube at: https://wwww.youtube.com/watch?v=hrQhMx_pxS0 , Donovan says at 1:05:53-1:06:49:
"But it's not really a submarine, you know what it . . . the song's about? . . . It's really about the life that they've been now forced in, inside their own lives in the white tower called Beatle frame and not really having any contact with reality out there anymore . . . We're actually insulated and now against the outer world. It wasn't a very pleasant thing to be . . ."
I found in the UseNet Guide to Beatles Recording Variations version 2, compiled by Joseph Brennan a variant he found in the June 3, 1966 mono version of "Yellow Submarine" where Ringo (?) in the last line of Verse 3 instead of singing "In our yellow SUBmarine" sings, "In our yellow CLUBmarine."
It was an extremely exclusive club that Paul could not exit alive.