Yes, they're taking from the Apple playbook so people who don't know will think they actually do things that don't involve leather or sheep at Reddit HQ. It's IPO shenanigans.
It used to be, they were called sponsored links, but the comment sections got filled with angry comments about the ads and people would downvote the shit out of them, then they removed comments, and after the redesign ads didn't have threads/engagement but now they do.
One of my friends tried advertising that way and it went poorly, and the ads weren't even for a real product just a test balloon for the concept.
Pepe also got very mad when your ad replaced the moose in the sidebar.
Ironically, it was spez who introduced sponsored links with comments then, so what's old is new again! I wonder if this time will be different... (Not really, I know how this will end)
The difference is companies used to just run their own super cheap bots to spam fake "engagement" to the site. Now since the API is gone they have to pay Reddit directly for the privilege.
I think the differentiation is in who's placing the ad.
There were sponsored ads before where a company reached out to Reddit and bought advertisements and read it took the money for them and posted them. They were labeled as sponsored.
But since the beginning of Reddit, advertising firms have just posted nearly blatant ads without notifying anyone.
Sounds to me like reddit's just removing he sponsored indicator from their sponsored ad sales.
On new reddit, I think. Haven't really used new reddit though. The real death of the site will be when they actually kill off old reddit rather than slowly feature depriving it.