What I can’t figure out is how they intend to make money while allowing external instances access to the content?

They already have a significant amount of theoretical users since they're allowing it to be used with an Instagram account, and they're obviously not going to let users sign in to other instances using the official app. And frankly, the kind of user interested in using threads probably has near zero overlap with the people who would actually bother to join a different instance to browse content from threads.