Except for the fact that they aren’t replacing keywords on the user end, simply matching advertiser keywords to a broader range of keywords specifically for the ad results.
Claiming they are replacing user keywords for higher value ones is absolutely incorrect, which is what the article they got that info from specifically claimed before it was retracted.
They aren’t taking watch searches and showing only luxury brand results, they are taking luxury watch searches and showing generic ads for “watches” alongside the relevant search results through the normal Algorithm which ties to find what it thinks is most relevant to those keywords.
That latter one is something all search engines do and without doing so they wouldn’t be very useful to the average person who doesn’t know about search operators and advanced search refining tools.