Cannibalization is the core tension in hybrid monetization. More ads raise ad revenue linearly, but can depress purchase conversion and retention, so total LTV rises and then falls as ad load increases.
The effect is strongest in IAP-led games and among high-value players. It is also slow to show: purchase behaviour and retention need matured cohorts to read, while ad revenue is visible immediately. That asymmetry is why guardrails should be set before a test starts.