1. Ezoic is an official Partner with Google. We are bound by the terms of our partnership with them, not by Adsense terms.
2. Just to clarify how Ezoic works, the Current Layout you are seeing is different for every user; we use a lot of different layouts - so what you are seeing is not what the user base sees necessarily.
3. We've tested drop down menus in many of the system's layout experiments on many hundreds of sites for more than 3 years, generating many millions of dollars of revenue through Adsense and other ad networks. Google clarified their stance on drop down menus in 2007 as "use your judgement". It's all about preventing accidental clicks which we prevent with proper padding and spacing on the drop down item. Mostly, it appears to be an "old" issue that isn't enforced because the risk of accidental clicks has been reduced through proper drown down functionality (remember how finicky they were 10 years ago). As an example, every single mobile optimized site on the internet has a menu that drops over the ads.
A lot of sites on the internet use drop down menus over ads.