It's only pro privacy because users will be able to opt out of allowing companies to use their likeness in ads. But really, what this really means is that all Facebook advertisements are going to be what "Sponsored Stories" were. No controversial features are being removed, they're being actively pushed by Facebook.
The sentence is true, though incomplete. Facebook has many ad programs, and has chosen to shut down one of them. That it also happens to oversell the content through ambiguity is icing.
Doing so I can see a possible issue is endorsement. That is, I go to starbuck near Columbia and I don't need my friends to know that I was there a week later. Or I don't need Facebook to tell my friends that I like X group or X product two weeks after I have liked it. If I want to endorse my likes for real, and actually want people to hear about this great product or this great mission on FB, I would have just make a bunch of status update myself.
But FB seems to think differently: let me take care of that for you. Instead of the user (me, I) doing all the selective publishing to tell my friends what a great product I think foobar is offering, FB will automate that process and put it in my friend's newsfeed and sidebar regularly when that product/group is on some ad campaign. In essence, I think FB is doing too much on behalf of the user since "endorsement" is a serious legal matter. Not entirely a bad thing. I have found some great stuff from these SS too, but I think for other people SS is not. I am not sure if this is the actual issue behind SS, but hopefully it is.
This seems like the buried lede? Note even in the story!