Yeah, this. Tagging a video as for kids doesn't just stop certain types of ads running on it, it also disables many core YouTube features there too. For instance, you can't use the miniplayer, add it to a playlist, etc.

This puts creators of videos that might potentially appeal to kids in a bad situation, since either they tag it as such and watch their video get buried, or avoid doing so and hope YouTube or the FTC doesn't disagree with them.