Looks to be an iOS port of NewPipe, offering a $2.99 subcription to use.
Could be not horrible assuming it actually functions as newpipe does, but doesn't appear to be open source (found listed developers Github, no repository for this)
In terms of "are they allowed to", of course. They can take as much or as little of Newpipe as they'd like and monetize it however they like, as Newpipe is open source.
EDIT: The App Store does not facilitate releases under GPL licenses, so this is likely not acceptable behavior.