YouTube seems to be experimenting with injecting ads into video itself
YouTube appears to be experimenting with injecting ads into the video stream, rather than having them as separate videos. That is what the maker of SponsorBlock claims. The consequences for ad blockers are unknown.
SponsorBlock, among others, is experiencing consequences of the experiment, reports the maker. YouTube makes the ads part of the video stream that users receive with the step, making it more difficult to block the ads. The creator of uBlock Origin reports that there is a workaround.
The step probably does not mean the end for SponsorBlock or ad blockers, believes the creator of SponsorBlock. It does make blocking more difficult. Adblockers try to block advertisements around videos, while SponsorBlock focuses on sponsored segments that creators place within videos. The problem for SponsorBlock is that due to YouTube's step, the time codes are not the same for everyone and the service can therefore function less well.
YouTube has often taken steps to make it more difficult for ad blockers. Google has not yet confirmed this step. This is still an experiment and it is unknown if and when advertisements will become part of the video stream itself for all users.