The reason algorithmic ordering is so common is because that's what gives the most runway for advertising, behavior manipulation/tracking, and its downstream financial effects.
You’re both right. Algorithmic feeds boost engagement, both by surfacing the most-engaging content and removing the burden of trimming one’s follow list, and also aids in serving ads. (Both by making them easier to sneak in and in the same engine that surfaces engaging organic content being useful for serving engaging ads.)
If you are trying to take users away from twitter, you're going to focus on some 'nice for the user' things (or, at least, 'nicer than twitter for the user').
Like most things in life, this isn't a binary choice (user or advertiser). They're going to try to optimize for both, striking a balance.