So, let's be clear here. The problem is not that they've prohibited people from putting this information in the app title. The problem comes if they've done so without introducing another way for the user to express their preference for ad-free apps. E.g. it should even work better if, hypothetically, the search function prioritized ad-free apps anyway when the user puts "no ads" in the search box.
I can't tell if this is the case right now because, well, the store is still full of apps with "no ads" in the title. Those are still coming up first.
And google doesn't require a share of revenue for mobile ads either.
Some users clearly prefer apps without ads, and will have a better user experience without ads. Google makes lots of product design decisions to attempt to improve user experience (even if they fail often).
Therefore there isn't a clear incentive to prevent the user finding an app without ads.
Sure, has been like that for a very long time: Gmail sorts your emails into "General, Social Networks, Ads and Notifications". Only on the ads inbox, Google shows you ads.
If a Google app has no ads, it is because the information they are gathering feeds into the other ad algorithms enough to make it worthwhile. They are in an unusual position of being able to do that because of their size. (Not unique, but unusual.)
I can't tell if this is the case right now because, well, the store is still full of apps with "no ads" in the title. Those are still coming up first.