A new YouTube ad format called Watch-While Ads spotted earlier this month has been officialy described by Google.
Unlike traditional mid-roll ads, these do not pause the video, providing a non-disruptive viewing experience for users.

Watch-While Ads are supported across Demand Gen, Performance Max, and App Campaigns for Install and leverage single image ads. Users can close the ads manually, or they will disappear automatically after 30 seconds of inactivity.

This change was noted by Hana Kobzová in the updated image asset specs page for Demand Gen campaigns, indicating that advertisers may already be using this format without realizing it.