Google knows how to avoid mistakes like not bucketing by session. Holdback users just did fewer unique search sessions overall, because whilst for most people Google was a great way to book vacations, hotel stays, to find games to buy and so on, for holdback users it was limited to informational research only. That's an important use case but probably over-represented amongst HN users, some kinds of people use search engines primarily to buy things.

How much a click is worth to a business is a very good ranking signal, albeit not the only one. Google ranks by bid but also quality score and many other factors. If users click your ad, then return to the results page and click something else, that hurts the advertiser's quality score and the amount of money needed to continue ranking goes up so such ads are pushed out of the results or only show up when there's less competition.

The reason auction bids work well as a ranking signal is that it rewards accurate targeting. The ad click is worth more to companies that are only showing ads to people who are likely to buy something. Spamming irrelevant ads is very bad for users. You can try to attack that problem indirectly by having some convoluted process to decide if an ad is relevant to a query, but the ground truth is "did the click lead to a purchase?" and the best way to assess that is to just let advertisers bid against each other in an auction. It also interacts well with general supply management - if users are being annoyed by too many irrelevant ads, you can just restrict slot supply and due to the auction the least relevant ads are automatically pushed out by market economics.

The issue is precisely that "did the click lead to a purchase" is not a good target. That's a target for the advertiser, and is adversarial for the user. "Did the click find the best deal for the user (considering the tradeoffs they care about)" is a good target for the user. The winner in an auction in a competitive market is pretty much guaranteed to be the worst match under that ranking.

This is obvious when looking at something extremely competitive like securities. Having your broker set you up with the counterparty that bid the most to be put in front of you is obviously not going to get you the best trade. Responding to ads for financial instruments is how you get scammed (e.g. shitcoins and pump-and-dumps).

You can't optimize for knowing better than the buyer themselves. If they bought, you have to assume they found the best deal for them considering all the tradeoffs they care about. And that if a business is willing to pay more for that click than another, it's more likely to lead to a sale and therefore was the best deal, not the worst.

Sure, there are many situations where users make mistakes and do some bad deal. But there always will be, that's not a solvable problem. Is it not the nirvana fallacy to describe the potential for suboptimal outcomes as an issue? Search engines and AI are great tools to help users avoid exactly that outcome.