They used OpenAI davinci to generate the dataset for instruction tuning. They mention one of the reasons this model is noncommercial is because OpenAI's terms of use prohibit developing models that compete with OpenAI.
They also published the generated dataset.
If one were to use this dataset to tune your own commercial model, would this be OK, or illegal? I would guess OpenAIs ToS no longer applies, as this is now Alpaca's dataset. You are never agreeing to OpenAIs ToS.