They do a few other opinionated things, like using the fsync kernel and layering Steam rather than having people use the flatpak, but it’s essentially as you say: atomic Fedora, pulling from Kinoite or Silverblue as the base before making their changes.
I understand that logic, but “being the product” must not really be that bad for them. They might complain, but if it was truly distasteful, they’d do something about it.
And being exploited for profit and explicitly knowing it is about the saddest thing I can think of for my fellow humans. It’s no wonder the billionaires just take and take, because people let them.