"There's no credible evidence that your phone runs a secret, always-on microphone to target ads, and there are clear technical and policy reasons why."
I believe this statement with the important caveat to target ads. The liability exposure of such activity simply for ads revenue does seem to be too high a cost.
Laws matter, too. The federal Wiretap Act bans intercepting conversations without consent, and many states (like California) require all parties to consent, stacking civil and even criminal liability on covert, continuous capture. An "always-listening for ads" feature would constantly record non-consenting bystanders and invite massive legal exposure. I know that's not completely reassuring, but that's why it's implausible in practice.
Of course, with all the data your phone is collecting on you, it probably amounts to the same thing.
"The unsettling feeling that your device is spying on you is real — but the culprit isn't a secret microphone. It's the data broker industry,"
And of course, what the state is doing is an entirely different conversation.