As my sibling comment points out, society is already pretty effective at advertising to children. I have strong doubts that Google (or others) would derive much useful-for-advertising data about “habits” of children from a smart watch. Especially not data that cannot be acquired elsewhere, easier. That’s to say nothing of the slowly growing body of laws that would prevent this.

I think it’s very plausible that Google thinks $230+$10/mo is already a great business opportunity. I’m guessing the better “prize” is keeping kids from getting their first iPhone in school - most teenagers greatly prefer iPhones.