From what my results indicate, they stop the ads from running. So you wouldn't see ads that were incorrectly labeled, you WOULDN'T see ads that should be running but were incorrectly flagged as needing a political affiliation label.

And from the looks of the Yoga ads, there are hundreds that have been flagged/paused as needing to disclose they are political (when they actually aren't.)

Your anecdotal experience is completely irrelevant to the statement that you made.