Can browsers know which cookies are necessary for a site functioning, logins, etc and which are for tracking, ads etc? There are many ways one can eg block third party cookies and that helps and rarely causes issues, but tracking can also be done with first party cookies, let alone fingerprinting.

For example, firefox's "strict tracking protection" setting also breaks a bunch of websites.

There are some browsers, that implement it like it was originally intended and asks the user for each cookie individually: Do you want to store "PHPSESSIONID=12345"? -> Yes. Do you want "AdTRackingID..." -> No. Do you want "AWStelemtry..." -> No, and reject all further.

Midori is an example for a graphical one, while there is Lynx for the terminal.

Most laws make a distinction between cookies stored for "technical purposes" and those stored for marketing / tracking.

The former are things like "does the user want dark mode", the language you chose to use the website in, the contents of your cart, your login info etc. The latter are for tracking. Typically, the former don't need consent, the latter do. Browsers have no way of telling the two apart.