They didn't invest in OpenBazaar, they invested in OB1, the company who is leading development on OpenBazaar. I'm a co-founder of OB1 and we monetize by offering services to users on the platform, not by monetizing the platform directly (no fees).
How do things like privacy policies, terms of service, contracts between parties work?
Because this is a protocol for decentralized trade, and a network to engage in trade, there's really no terms of service or privacy policies that can be enforced between users. They connect to each other completely P2P, the devs or anyone else can't enforce anything between them (and don't even know a transaction is happening).
No awareness by the company and no easy ability to enforce terms before users make me wonder why the heck I'd ever want to try to sell or buy something on that platform. Seems like craigslist but with too high a bar of entry for the good-intentioned non-fraudster non-tech-savvy users.