To me that means "stuff that's most likely fine to preserve and most likely isn't found on other places".
Also according to Sound Cloud's ToS by using them you are granting all users rights to "to use, copy, listen to offline, repost, transmit or otherwise distribute" your content. So if Archive Team downloads everything they can (that does not in itself violate copyright (i.e. they are not Metallica songs)) there should be no copyright issues.
Which means you're only allowed to redistribute content through the facilities provided by Soundcloud. You're not allowed to simply download music and share it outside of the website.
That said, simply downloading music from Soundcloud isn't copyright infringement. You have to do that anyway to listen to the music. But redistributing it (outside of Soundcloud) is illegal unless the copyright holder has granted permission to do so, or the work is under Public Domain.
At least I read this only as "by default you are granting all users permission to do whatever you like", then you can restrict the access rights according to next part.
>You can limit and restrict the availability of certain of Your Content to other users of the Platform, and to users of Linked Services
I'd guess there are still plenty of stuff to backup even if some artists/performers/bands use more restrictive licensing.