Re-encoding is probably too expensive. And storing the same variant for everyone would effectively double the storage requirement (for ad-free users) and will be quickly defeated with Sponsorblock
YouTube already re-encodes every uploaded video into multiple formats; it would be possible for them to develop a "smart" encoder to be aware of the visual content of the video in order to place "key" frames at natural breaking points of the video, such that subsequent ad insertion would be semantically correct and not too jarring.