A lot of people is assuming the change is AI related but it sounds more like they are going to start (or maybe clarifying that they already do) actively monitoring creations for illegal activity and the like. I'm reserving judgement here / just making an observation.
The "worldwide royalty free distribution thing" is more or less the standard industry terms when a cloud service is allowed to redistribute work via something like a share button. But I wonder if the terms can be more explicit in general (for example: only grant the license if the user uses the "share" functionality on that particular file)