Is this extension, that came along with Avast Free starting some time in 2021, necessary for Web Shield to work? Or is it just an extra add-on that runs independent of the Avast UI? Am I safe to remove this extension and not cause any issues with the Web Shield?
I don’t use Chrome, but I doubt you need the extension. My Firefox doesn’t have it, and Web Shield in Avast Free works fine.
Cool. Removed. Worst case I can always re-add it from the Chrome web store if I really need it, although it seems like it was more of a supplemental tool to tell you about trackers and ads you were getting on each website.
Yup you’re good to go 
I did this and nothing happened, probably won’t hurt, but better to have it.
Did what part, specifically?
Can’t Chrome disable extensions without deleting them? Firefox can. That would be an easy way to see if the extension actually does something useful.
Depends on the extension, but I don’t think the Avast one is one you can keep in your Chrome browser while ‘disabled’ the way you can with, say, AdBlock Plus.