The existence of the paid offering doesn't invalidate use of the free offering, regardless of whether people are permitting ads on the latter. Any given Youtube page is just a collection of web elements and a call to a video server: these things get loaded or blocked at my sole discretion. My hardware, my web browser, my internet bandwidth, my opsec, my time.

If I put household items out on the nature strip, I have no expectation that passers-by will have a cup of tea with me first, then take every item as an indivisible lot. So my proposal to Google is: take those items off the nature strip, put them back inside the house and lock the door. Until they do that, no issue exists, despite the company's efforts to fabricate one.