This is significantly different from how Hulu does things. With Disney's service, pause ads are only part of the experience if you stick with the base $6 per month tier. Additionally, there's no motion with Hulu's pause ads; they're static images that take over part of your screen. However, Brian Lesser, the CEO of AT&T's Xandr advertising division, contends the telecom still sees the new ads as "non-interruptive." Lesser went on to claim that research suggests people "would rather see immersive advertising than a freeze-frame of a screensaver of something else."
Recent history suggests most people would probably disagree with Lesser's assessment. When Netflix tried running promos between episode breaks last year, the small subset of users the company tested the feature with were livid. There's obviously a very delicate balance content providers have to strike with ads. And if AT&T's forums are any indication, the company hasn't found that balance just yet. What's more clear is that pause ads are the new normal. AT&T told Variety it will likely provide further details on the platform at CES in January.
Update, 12/11/19 3:20PM ET: This story has been updated to clarify that AT&T's pause ads will include video, but with no sound.