You can get the version that phones home or you can pay extra for the version that doesn't.
I suppose the problem is that they'd make this transparent and there would likely be a bit of backlash ... thank goodness that regulatory agencies have our best interests at heart /s
I originally bought Kindles without ads, but for my third Kindle I decided to buy it with ads to see how bad they were. You can pay the extra later to get rid of ads, so if it turns out buying the version with ads was a mistake it is easy to fix it.
I don't see the sleep screen except briefly between the time I open the cover and the time the Kindle wakes up. I'm rarely on the home screen. I do almost all book shopping on my computer rather than on my Kindle. Thus I almost never actually see an ad, and when I do it is almost always not interfering with what I'm there to do.
The few ads that I do briefly see in those rare times I'm not in a book or in my library are static images without sound. For the sleep screen it is usually an ad for a book and the image is the book cover, which is often actually nice to look at.
After actually seeing the ads, I now feel like I wasted my money buying the ad-free versions for my first two Kindles.
I've done this with one other Kindle and several other people have done it based on my experience and they've all gotten ads removed for free and some have gotten store credit in various amounts.
I didn't even mention why I wanted the ads gone, I just asked how to remove them and they gave me free books and a typically $20 upgrade for free.
There was a time that the Kindle ads were actually appropriate. I've even purchased the odd sci-fi book that showed up on the wake screen. But that's been a couple of years. Now I get the same bodice-rippers you're seeing. What a waste; Amazon has my book purchase history going back 20 years, and that is what you're showing me? Do your advertising customers know this? Because, shallow guy that I am, I read sci-fi, philosophy, and books on distance running. That's pretty much it. I did read part of a Danielle Steele book (imagine GPT-3 wrote a romance novel...) 35 years ago when I was married to a woman who read those, but I doubt Amazon knows that.