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Google's culture wasn't a problem – and maybe a good thing! – when you had a gigantic money printer working in the background, paying for everything. But it was there, ready to be a problem once times got tough.
I disagree that it was "fine" because the people who were respected and held up as prime examples of Googlers – for decades – almost always had nothing to do with the ads business. This sends a signal to the rest that the ads business doesn't really matter, it's not the important work, it's akin to the janitorial work that has to happen so the rest of us can work here. If you do that long enough you end up with people optimizing towards things that aren't aligned with the needs of the business. It was on autopilot, relatively, compared to other areas.