Ignore it if ambassador, masquerade, JoaT or chapel are on the board. (http://councilroom.com/game?game_id=game-20120114-085710-15ddf643.html)
Interesting, I just happened to read michaeljb's description of his Isodom 3 match against Marcus316 right before this thread:
Game 5: michaeljb 39 - 32 Marcus316
Ambassador, Apothecary, Chapel, Coppersmith, Embargo, Highway, Ill-Gotten Gains, Loan, Stables, Trade Route
The first thing I notice is that I want to Embargo IGG. (...)
However, note further that - as michaeljb pointed out - this was a really bad board for Ambassador, as things like Stables, Coppersmith, and Apothecary all like having Coppers around. Which was also why Embargoing the Copper-generating IGGs was even more important than normal. Plus, just a single Embargo completely wrecks the IGG rush strategy. It's not like michaeljb was aiming for a multiple-Embargo-based strategy.
So, in
most boards, Ambassador's presence (or other game-warping cheap cards) renders Embargo suboptimal. But in michaeljb's match game, Ambassador was much less potent than it normally is, and Embargo was much more so (due to the IGG rush problem).
That said, I note that the game linked in the OP as an example of "ignore Embargo with Ambassador around" is really an example of "ignore Embargo with gainers around." Especially where Highway + Workshop/Feast shenanigans are coughing out Provinces.