This clause is referring to you (the publisher) licensing your content to itch.io. You’ve pasted it without the context of the paragraph it is located in, so it may be confusing by itself.
This clause is so that itchio can operate by distributing the intellectual property you upload onto our services. This is not a license between publishers on our platform and end-users. We do not provide a license for publishers to end-users with regards to redistribution (eg. You can not buy someone’s game on itch.io then try to resell it). All content is “all rights reserved” by default. A publisher can opt to provide a license for re-use if that’s appropriate for what they’re selling (eg. game assets).