You get the full source to the engine, under a restricted license (roughly: you can make a game with it, modify it in the process and distribute binaries of the game, everything else is forbidden, you are not allowed to use it with services that are in competition with Amazons cloud offerings)

It seems to be free and with no application process though, right?

So anyone can download it, but you can't modify and redistribute it?

More or less. You are supposed to use it to make games that use Amazon infrastructure so Amazon can make money of that, but you could make one that doesn't for totally free as well.

(Of course their non-legal texts don't mention the "don't use Amazon competitors" clause all that explicitly, only explaining that yes, you can use it without online features or software running on hardware you own)

Ah, so this makes perfect sense. The parent comment is the most relevant one here, considering that amazon is banking on tons of (amazon only!!!) value being added to their distribution system with this engine. Kind of the same play they made (and failed with) with the Amazon App Market.