What are you saying? This is an open source project that is connected to the fediverse. It aims to be something comparable to soundcloud where people can share their music. What about this is says monetization?
The publishing referenced in the ad copy. There's no talk of how licensing is handled or who hosts what where. Just because it starts off as OSS and self hosted does not mean it stays that way.
I am unsure if I understand you correctly. Funkwhale is for you to publish music or other audio you make yourself. Not for your commercial music library. And the software itself is under the GNU AGPLv3. You can host the software yourself on your own server or you join an instance of someone else. Just like lemmy, mastodon or all the other fediverse projects.