It is certainly a service that's being provided. If not by GitHub, then by whom?
I'll repeat the definition of service: The “Service” refers to the applications, software, products, and services provided by GitHub, including any Beta Previews.
So do you believe if you hosted a closed source project on GitHub, and GitHub decided they want to integrate this into their service they would simply be allowed to take the code?
Fortunately HN commenters are not judges. And I would wager any bet that MS lawyers would not try to argue based on their ToS either, that would be a recipe for loosing any court case.
I'll repeat the definition of service: The “Service” refers to the applications, software, products, and services provided by GitHub, including any Beta Previews.