I'm curious if apps are allowed by Apple to make their functions dependent upon ad tracking. Personally I think it would be a completely fair arrangement for the app to say that it only works if you are willing to allow ad-tracking to be enabled.
It is also not out of line with other apps that require access to camera/mic/etc. to function.
Let people make the choice whether they are willing to cede privacy in exchange for free software. Or even have a choice to pay a subscription for no ads or get it free if they allow ad tracking.
In their guidelines Apple has said this is not allowed. If a user declines tracking the developer cannot hobble any of the app’s features.