In other words, it is that it's going to be very difficult for users to intuitively understand what "half ads" means and why they should pay for it.
It's a completely nonsensical compromise. Musk's product ideas for Twitter seems to assume that what everyone wants is for Twitter to be more complex, with more knobs to fiddle with.
There's a simple way to make this legible to the user: instead of slashing ad frequency, eliminate half of ad surface. I.e. if there are N places on the page where ads are being served, turn off half of them for the paying users. This will be an obvious difference, and remain so even as the ad intensity/frequency increases.
but there aren't N places on the page where ads are shown, there's one place: in the feed, at an unspecified frequency as you scroll. twitter doesn't have any ad surfaces to eliminate.
Half of ads is strictly more valuable than all of them. Whether or not it's worth $8 is another question, but people still forget it's all a supplier-driven market: there is, and is not going to be, an option to pay $8 and get no ads. You choose out of what's being made available.
