Google has announced that on April 1, 2020, its Google Ads APITrack this API will stop the creation of App engagement campaigns for any app in a prohibited category. As of now, developers can create App engagement campaigns for apps in any category. The only current limitation is that prohibited category apps cannot serve ads. This contradiction has caused confusion for advertisers in the past, and Google is making the announced change accordingly.
Prohibited ad categories include alcohol in personalized advertising, gambling in personalized advertising, location-based gambling in personalized advertising, clinical trial recruitment in personalized advertising, restricted drug terms in personalized advertising, and users under 13 in personalized advertising. Nuances exist within each of these categories. For a better understanding of the categories, review Google's policy site.
When the change goes into effect, if a campaign references an app in a prohibited category, an error will be received. For campaigns using v3 or later, the error received will show SENSITIVE CATEGORY APP error. For those using versions before v3, and UNKNOWN error will be received. For more details, check out Google's blog post announcement.