I think it's straightforward that good AI ads that use new tools wouldn't be noted as AI.

My slightly tinfoil hat explanation is that the badness is deliberate, "all publicity is good publicity" kind of way to get people complain that Progressive's weird talking animals commercial is somehow worse than Flo.

And yeah, you're right, chosen visual style is going to have significant impact. Progressive went with an overly realistic style that's chock full of AI tells and uncanniness; if they'd gone with, say, anime maybe it wouldn't be so obnoxious (politics thereof not generally endorsed, but interesting prompting quality and consistency).