1. (because of [kids → children]) ads with keywords “+kids +clothing” would also match searches like “clothing for young child” and “newborn children's clothing”
2. (because of [kids clothing → kidswear]) ads with keywords “+kids +clothing” would also match searches like ”nikolai kidswear” and “kidswear outlet”
3. (because of [clothing → apparel / outlet]) ads with keywords “+kids +clothing” would also match searches like “creative apparel for kids” and “kids outfits”
That is what the slide's title (“Advertisers benefit via closing recall gaps”) refers to: the gaps in recall (matching) are being closed, by being broader.
The WIRED article misunderstood the slide, and was entirely based on the premise that if you searched for “children’s clothing” you'd get results for “NIKOLAI-brand kidswear” which is not true (and would indeed have been “startling”, not to mention obvious, if it were true). In fact, the organic (non-ads) part of the search results in Google are always completely independent of anything in ads, something that the Search team in Google have maintained for several decades as a fundamental principle.