So just like any other distro, like grapheneOS or Debian, but (semi?) closed source. Everyone can change their tos (do the degree of their bylaws & AOSP).
There seems to be a lot wrong with their approach (not open sauce, specific hardware choice, ofc not open hardware), but you can't compare prices with phones that bundle in Factbook & co. Ask any are they so cheap.
I do think paying for dev vs having it bundled into the initial purchase price is vastly better bcs the incentives are better - less ewaste/planned obsolescence.
Also they might be willing to get audited so you get a yearly report if they truly respect their promise, if they changed their tos, and if they respect gdpr (they have to list all their data brokers).