Got this notification when I opened Chrome when coming back to my desk after lunch.
"We changed our privacy settings to allow us to snoop on what you're looking at and shove you ads accordingly. Feel free to opt out, but we'll probably opt you back in when you aren't paying attention."
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They do give you that option for a lot of it: https://myadcenter.google.com/
You can set whether information like income, profession, education, etc is used, + or - different topics/brands, as well as see the ads you've been shown in the past.
This feature that the OP posted about however is about doing all this in the browser instead of doing the tracking on their servers and across various websites with embedded analytics/tracking code. The end goal is also to get rid of third-party cookies entirely, hopefully shutting down that method of tracking, while still being able to provide targeted advertising.
I'm joking of course but if people really wanted relevant adds they would just set it up like they create playlists in spotify. Spotify doesn't have to track your browser history to guess what music will you enjoy because people just tell them that. Obviously no one wants personalized ads. Google knows this but they keep pretending that all this tracking is to improve your experience.