It still looks pretty standard for a social media platform, it covers their bases for legalities. I can see how someone could read that and be concerned, but I'll bet https://mastodon.social/@dansup would reply if someone asked a question for clarification on mastodon, he's generally really good about that.
Edit Update: Seems like someone had similar concerns and dansup replied here: https://mstdn.social/@EdanOsborne/113413398742299770
Pretty sure it's just fasciation. It's usually rare so it tends to make them fairly valuable.