It doesn't, except that it runs it. There's no download link or code playground for running arbitrary code on it, so while technically it transfers the model to the computer where it's running (I think) it's not usually considered the same as distributing it.
I think it's a bit more subtle than that. The code of this tool runs in your browser and makes it download the model from huggingface. So it does not host the model or provide it to you, it just does the download on your behalf directly from where the owner of the model put it. The author of this tool is not providing the model to you, just automating the download for you.
Not saying it's not a copyright violation, and IANAL, but it's not a obvious one.
I think it's either running the model in the browser or a small part of it there. Maybe it's downloading parts of the model on the fly. But I kinda doubt it's all running on the server except for some simple RPC calls to the browser's WebGL.
