While the line is fuzzy, there's definitely a line. For example, when a video cuts away from the content to talk about a sponsor that's a clear ad.

> how would you expect any company to remove in-video "ads" without rampant accusations of censorship?

Removing would be somewhat difficult. Banning would not be complicated. Companies word those kinds of agreements all the time.

> If a channel posts a review of a piece of hardware that was sent to them for free by the manufacturer is the entire video an ad?

I'd say it depends, but the answer doesn't really matter. That's a straightforward category that can be allowed or not allowed directly, no need to worry about semantics.