When The Verge reached out to Xiaomi for clarification, the company said, "Advertising has been and will continue to be an integral part of Xiaomi's Internet services, a key component of the company's business model." However, the spokesperson did also say that they will offer options to remove ads. It's not clear if that includes an upcharge or paying some sort of fee, though; one Reddit user tried to turn off the settings that generated the ads, to no avail.
Xiaomi has been selling incredibly inexpensive MIUI handsets, and it's clear that advertising is one way to make up for that revenue. But the company doesn't seem to be measuring up to the promise that the ads will be "unobtrusive," and there appears to be no clear method to remove (or at least reduce) the number of ads being displayed.
Amazon has used similar practices with its Kindles and Fire tablets and Prime Exclusive phones: discounting hardware in exchange for ad displays. But the company has been relatively up front about the fact that you're buying a model that has advertising built in. And the company pulled ads from lock screens of Prime Exclusive phone models when the advertising threatened to impede the usage of the phone. And of course, if you even want those ads removed, you can just pay a fee to Amazon to take care of it.