They're allowed to change the offering. They're not allowed to offer you one thing, but supply another. YouTube is currently testing their legal waters. They currently offer an "ad free" experience with the subscription of Premium. Despite this, they still serve:
* In-feed ads. These include ads for content prominence (preferential placement for creators), articles with link-out, ads for Google products and services like purchasing movies and shows in their store, and ads for Google product features.
* Modal ads in videos which they facilitate. That is, pop-up ads in content.
* Ads for merchandise under the content.
* Ads for paid subscription to channels.
* In-content ads in the form of creator sponsorships. These are becoming egregious.
The official app is absolute GARBAGE now. I can't even turn off shorts anymore. I'm on the verge of cancelling Premium. Once the Digital Markets Act comes into effect in the EU in a couple of months I'll be installing alternative frontends for YouTube which include SponsorBlock.