I honestly don't believe this. I think YouTube used this as an excuse to crack down on channels they didn't like, for whatever reason. (And also a lot of other channels, because the flagging is poorly done. I know some people who run a very popular skateboarding instruction channel, and they've had huge problems with demonitization. The content is utterly inoffensive.)
I think if all you were concerned about is advertisers, you'd just let them pick that as a criteria: "Would you like to advertise on channels flagged by our system as potentially offensive?"
Some would, some wouldn't. Problem solved, you don't piss off creators, you make more money.
(Maybe the counter-argument to that is advertisers wouldn't want to appear on any YouTube channel because some other YouTube channel had offensive content, as though all of YouTube were a tainted brand, but that is frankly laughable.)