Usually the way the licenses are interpreted, if I run it myself and use it to generate $X million in revenue in my own business, I'm subject to the license. In this case, the license seems to cover any commercial usage at all, which would certainly include self-hosting for internal business purposes.

Why even bother demanding such terms? Release the weights or don't release the weights, but this is silly. No one is going to pay them to run or host a 7B static image model.