This question has been asked many times, and there has been a lot of confusion. From my side, I said that drop shipping was not allowed as two years ago, Google explicitly mentioned no drop shipping. However, this was changed to the wording Promoting products that are not stocked. https://support.google.com/merchants/answer/6150127#:~:text=Unavailable%20promotions
As I am a Google Platinum Product Expert, I get access to extra help in pondering issues or questions. After a month of waiting, Google has come back with the below short answer.
As long as the advertisers have stocked the products and can deliver the goods to the customer, their items should not be disapproved.
The most common reason why drop shippers get suspended is due to the lack of care, ie: not taking the time in setting up a trustworthy business.
Make sure you add accurate and full contact details (business address, email, telephone, contact form)
Do not submit any virtual addresses or PO boxes.
Yes I do, I have a service with more info here: https://feedarmy.com/google-merchant-center-suspended-get-back-on-google-shopping/