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"Legitimate interest" is a concept from GDPR, which is the EU's major legislation around digital rights. "Legitimate interest" is an extremely soft concept that basically says "a company must have some reason that is not obviously bullshit to process your data." That includes advertising. "We need to know your age, gender and city so we can decide what ads to show you" is considered "legitimate interest." See? Soft.
What it doesn't cover is "We just think it's desirable to accumulate as much data as we can about you for no particular reason and maybe we can just sell it one day, idk." That would not be considered "legitimate interest." Similarly, asking for e.g. a user's phone number but having no particular explanation for why you need it would not be "legitimate interest."
So when you see "legitimate interest" cookies as a category, you can interpret that as "cookies that have some purpose-- including advertising-- as opposed to literally no purpose other than superstitious data hoarding." Block them.
It's not thaaat soft. It's not quite clear what it means, exactly. The courts still have to work that out. But you will not get away with just any argument.
It's never legal to collect more data than necessary and/or for an unspecified purpose.
Tracking for personalized ads could be based either on consent or on legitimate interest. If it's consent, then they need to tell you up front what specifically they use the data for and some other things. If it's legitimate interest, they can just start doing it, but still have to tell you afterward and also inform you that you have the right to opt out.
I guess, practically, whether a company claims one or the other is whether it feels lucky about a court case. With consent, you are on the safe side but it's a little harder to get. Legitimate interest may get you more ad money in the short run but eventually, maybe or maybe not, a fine.
I don’t think I’ve ever been given an apparent choice to opt out of “legitimate interest” cookies, aside from blocking cookies at my browser
Then again I’m just trying to freeload off EU privacy protections
That's because they don't have to let you do that and mostly it's counterproductive to let you do that.
A prime example for a cookie with "legitimate interest" is a session cookie. Your shopping cart or even staying logged in wouldn't work without it, so it's not a good idea to even give the user the choice.
Legitimate basically means "needed for the function of what you're trying to do on that website", so ads are not it, but session cookies are. Everything in between is up for debate. (Usage tracking etc.)
Incorrect, session cookies are textbook functional cookies