Good video. Beyond realistic avatars, it's likely that our own avatars will be used to sell to our friends and family when we're not aware. But even limiting their realism doesn't solve this. An avatar that only somewhat resembles people you care about will still have an emotional pull on some level.
Advertising is protected as speech in the USA, even when it's manipulative. Only certain kids of truth and disclosure are enforced (e.g., medical ads).
What we really need to ban is the business model that allows our personal data to be used against our own interests. There are so many positive uses of the same intimate sensor data in terms of self-improvement and health, social interactions and more. If we can't separate out the bad or harmful uses, we'll have to ban too much.