The problem is you have to prove intent to build a legal case. If the person holding a banner doesn't know whatever they're advertising is illegal then they wouldn't be liable. A case could be made if they're informed it's illegal and they continue anyways, but that isn't likely to happen.

If a billboard starts advertising meth, you obviously go after the meth dealer. But the billboard owner—who painted the ad onto it—should also have liability (albeit civil).

"If someone were to stand outside holding a big banner advertising something malicious/illegal they'll be in legal trouble pretty quickly, which I think is fair."

For the most part, you would not. While it is not protected by the first amendment in the US to advertise illegal products, it is also not particularly restricted in most of the US.

To whit: If you hold up a big banner saying "fentanyl sale - 30 cents per gram", you would not have committed a crime or an actionable legal tort in most places.

The thing that is actionable everywhere is deceptive/fraudulent/misleading advertising.