If they run ads on them they do. Demonetized just means the creators don’t see any.

YouTube doesn't run ads on demonetized videos - that's what demonetizing a channel is all about. It means the advertisers don't want to pay for the ads to show next to those videos.

Is that something YouTube does? I was under the impression demonitized videos had no ads of any kind. As opposed to the copyright system rules where you will get ads but the revenue is diverted to someone else instead.

you are right. demonitized means unsuitable for advertisers, which means no ads.

To clarify - often videos will have ads on them prior to being demonetized. My understanding is that when this happens, YT keeps all of the ad revenue and the creator sees none. Over time this is a lot of money I am sure.

Maybe not on hard demonetized, but they will run ads on videos of creators that are not eligible for the partner program:

https://www.engadget.com/youtube-ads-on-small-creator-videos...

*don't see any from the Youtube Partner Program. They're still free to get sponsors and run their own advertisements. That just requires, you know, work.

It is a loss leader then and they profit indirectly.

Well I presume they would just kick the creators off if they thought they could get away with it without massive backlash, they're happy to randomly ban them at least