I've used that website once or twice...
As you say, fidvo, they are fully within their right to run calibre on their server and allow people to upload files for conversion.
This is pretty standard
SaaS, using a Freemium payment model. calibre is GPL3, not AGPL3, so even if they were modifying the calibre source code for their own use they would not be required to freely publish their changes... but we have no indication they are changing it anyway, as the official source code comes with a powerful command-line backend which can perform standalone conversions anyway.
They also give accreditation to calibre, which is admirably ethical of them

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Quote:
Our online ebook converter support a variety of input formats like PDF, ePub, HTML, LIT, LRF, mobi and more. Choose the target format you need for your ebook reader below and start converting. If you are not sure what format your reader supports, you can find more information at mobileread.com.
For most ebook conversions on this website, we make use of the great ebook tool Calibre. Please use it in case you need more fine grained settings.
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Note: If you ask Richard Stallman for
his opinion, using cloud-hosted software to do your work for you is a sin. You should run your own copy locally, regardless of whether you actually own a device capable of running the software (thinking of people who only use Android/iOS and/or Chromebooks).