Ah I think we have a different definition of "baked in".
What I mean is that the video does not change urls or sources when playing the ad and the video. So it looks like an unbroken video feed but on the back end, YouTube added the video between the designated time frames.
I get what you mean that if ads never change and are forever in the video file then sponsorblock will continue to work. But I don't think this is what YouTube will do.