So at first it was MKBHD who's video was used as an ad. Now I see Flossy Carter's video being used as an Ad. Why is YouTube starting to display youtubers videos as ads?
I don't think it's YT that's doing it, it's the advertisers. Whether or not they have authorization for it (IIRC MKBHD's video was used without his consent) that's another thing. Why is Pepsi using bits of music videos? Why do dating apps use 'allegedly' submitted video intros? Same thing here. Advertising catching up to their audiences.
They add videos as it is considered the source of income. This adds viewed will give you a source of revenue. Also they aren't added unless someone visittes 4000 hours of the video or your channel have 1000 subscribers.