But in this case I align with their decision. I don't mind websites that have advertisements as long as they aren't intrusive, and my privacy is maintained. If those demands were met on all of the sites I frequent I would uninstall my ad-blocker
It would be a cold day in hell if google stopped tracking people.
On the other hand, privacy is more about choosing what you share than not sharing things, and imo Google does an okay job at letting users control what they share; better than most companies operating at that scale. And while their privacy controls are not very fine grained, there seems to be an emphasis on making sure even non-technical users understand what is being shared and why.
[Disclaimer: I work at Google. Every team I've interacted with takes this very seriously]
Full page ad interstitials on mobile will get you banned from AdSense, but Google also offer their own full page ad interstitials on mobile within AdSense. So long as it's them disrupting the UX its fine.
Not advocating for ads just notice the discrepancies in policy.