I have noticed quite edgy videos that were ad-free before now heavily feature ads, so not sure about that. Many advertisers are not even based in the US, UK or any western country.

Not showing ads is the same as just burning money for Google.

I would not be surprised if there is some P(controversy | viewing user, time elapsed since original flagging) metric, and when it goes below a threshold, certain non-prestige or international ads can be shown - ads not likely to cause any problems.

Because someone, at some point, got an email that looked something like https://www.justice.gov/d9/2023-09/416421.pdf (via https://news.ycombinator.com/item?id=37572692 ) - and one does not simply see an email like that and not implement this kind of thing.