Verizon's VPN is an actual VPN. The fact that the VPN can be configured to block ads doesn't really matter very much, since, as you point out, that happens server-side, not on the device.

The Apple policy here is you can't use the VPN APIs to implement a content blocker. Or more generally, you're not supposed to use the VPN APIs to implement something other than a VPN, although they seem to be ok with some limited exceptions such as Charles Proxy. If the VPN itself offers other features, that falls outside the purview of Apple's policies.