Acceptable by who? Not by me.

I will dedicate the rest of my short existence to stopping whatever this is

Of course, to a certain subset of consumers. And a different subset would rather set their house on fire rather than allow such a thing.

> As a privacy safeguard, all camera and microphone inputs would be processed locally by on-device AI

I would not trust an advertising company to tell me the truth about this. How could I verify that this is indeed the case? How could I be sure that they won't push a software upgrade to change it?

> only short text summaries would be sent to company servers

Which is still a lot of data to be sending out.

> This way, a TV commercial could interact with you and your surroundings while still protecting your privacy.

What's the benefit of this, to anyone?

All TV commercials are an intrusive attack against the person, some are just better at engendering a sense of the futility of resistance than others.