There was a time when Google disallowed this. Google even asked us (Firefox team) to report ads squatting on our trademarks. Eventually they stopped caring and now it's in their ad sales pitchdeck just how effective trademark squatting can be.
Clearly if you're not an advertiser, you can call out brands by name for having junky products (e.g. "The Worst Air Purifier We’ve Ever Tested" by Wirecutter on the Molekule air purifier). Similarly clearly, if you're an advertiser, you'll fall afoul of laws around false advertising if you tell non-truths in ads.
I expect that the reason Honeywell or Coway aren't punching down on Molekule in their ads isn't that they're afraid of lawsuits more than the Wirecutter, it's simply that their ads are meant to build their own brand awareness so they don't want to name any other brands.
Look at the screenshot in this post. All four of the ads at the top of the search results include the trademarked name "Midjourney" in the title of the ad.
This is more like putting up a giant sign outside of your Honda dealership saying "Best deals on new VWs!" but when you pull in they don't sell VWs, they sell their own competing products.
You can bid on competitor's keywords, but not use their trademarked name in the copy, especially not in a deliberately confusing way.
But I don't think Google moderates this very proactively.