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.)
It's fine if new videos get flagged, you can reupload them, but youtube bots flag old videos and there is no notification whatsoever. Even their own "Video manager board" not showing them as demonitised, because they still get money from youtube red and considered as claimed, you have to enter "edit video" to see the notification. You just have to manually search them... And for gaming channels with 1-2k videos it's a pain.
They already do this. People need to stop being angry at things they know nothing about.
Not to mention part of the problem was YouTube not enforcing their content guidelines to begin with. Hate speech has always been against their content guidelines, they just never actually enforced it.