Sounds quite similar to Markov chains which made me think of this story:

https://thedailywtf.com/articles/the-automated-curse-generator

Still gets a snort out of me every time Markov chains are mentioned.

B stands for Billion (Parameters) IIRC

To a certain degree, yes. If someone at Google decides to wage all-out war against ad blockers they have a good chance. But if that costs more money than it generates, odds are that someone will stop it. Google / Alphabet is publicly traded after all and that means profit above all else.

Embedding ads into the stream would be hard to counter, but it’s far away. That would invalidate caches along the way and need extra performance to reencode the stream with the ads inserted.

That’s extra costs that are hopefully orders of magnitude above the lost ad revenue from ad blockers