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I wouldn't call that an ad. Nor would I condemn Google occasionally reminding users to check their privacy settings. In fact, I encourage it.

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That's not google reminding you of privacy settings (in fact if you want to change those this menu is highly impractical with a lot of nesting). This is google making you agree with their T&C to go any further.

Isn't that effectively a legal requirement? That users must make some sort of actual confirmation step to acknowledge the terms for them to be legally enforceable?

I mean, look at my submission/comment history, I'm literally the voice of Google criticism on this website. But it's hard to see how this little diversion has to do with pop-up ads. It's not advertising, first and foremost.

I don't know of any websites that force me to agree to a privacy policy so I can access it while logged off.

Most websites aren't being fined billions by your government!

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