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This message is displayed in the browser because Google asked your browser to do it, and your browser got the message and put it there.
When displaying ads, the end user experience is 100% client-side. You are using your screen and speakers to observe it. You can turn off your speakers and screen if you want, which will effectively "block" the ad.
But that is silly. Not only do you own your screen and speakers, but you have control of what you're browser is doing, too (if you use a respectable browser). When HTML, CSS, JavaScript, and other content is downloaded, just that happened: file downloads. After it has been downloaded, your browser then consumes it.
When it is consumed, a lot happens, but ultimately, the code in the browser displays content. Your (respectable) browser does all of this, and will change the look depending on local fonts, accessibility options, etc. With an ad block add-on, it will also remove these ads.
However, when ads are removed, the DOM is mutated with deleted or replaced content. It is possible for a website to then write ad block detection scripts to see if the ad contents have been removed or not. There are many ways to do this, and this screenshot is the result of one way of doing it.
However, enter the cat-and-mouse-chase of ad block block blocks. You can block your ads, then block the ad block block like this screenshot. These types of ad block rules are less common, but many public ones are available. Check the uBlock Origin lists in the setting page. By default, only about a third of the lists are enabled, and these extra blocks are in there.
Another avenue of determining that ads were not loaded is for the server to inspect if client-side (you) requests were made to fetch the ads. Even if this is in place, the server cannot determine if you have actually watched the ad or not. It could try to do more client-side attempts at validating that you somehow displayed it, but again, that's client-side.
Imagine if you were sent a letter and a pamphlet in the mail. Imagine if the letter said that you could mail them back for a free sample of their product, but only if you read the pamphlet. They would have to trust that you read it, because you are reading your mail in the privacy of your own home. However, you could opt to toss the pamphlet (like an ad blocker) and never read it. It's your mail, your home, and your choice.
Really well explained. Thanks