Earlier quoted context omitted.
They don't necessarily need to put ads in the app. They can simply transfer that personal information to their larger people profiles making their existing ad networks more valuable. It could additionally be simply a play to keep someone _else_ from getting said data. (I think your argument still makes sense, just another angle on that part).
The privacy law implications (GDPR, the new California law, etc.) would probably crush Facebook as a company if they started doing that. They already paid over 100 million for just making false promises when they bought WhatsApp, now that the EU has sharpened their blades to take on big data farms like Google and Facebook, doing something like that would be suicide for FB. Any additional data farming would probably a…
(Also speculating) if that's more or less how it works, and an ads conglomerate like Google or Facebook is worth hundreds of billions, then even a fine of a billion dollars wouldn't be enough to deter them from this activity.
None of this is meant to stir up controversy or be negative or anything, I just think its an interesting mental exercise to consider this scenario and these motivations.