Same for every video game that allows mods, custom levels, and so on. The only difference is that Minecraft users make no money at all for their efforts. How terrible! Poor children!
Either that, or people just enjoy being creative, making things is fun, and it's okay for kids to just enjoy making things and sharing them with each other, even if (oh, gasp!) the business that built the engine benefits from it. And being able to make any money from this at all is just a nice bonus.
Minecraft dev. here, not strictly true. We have a pretty bustling marketplace full of paid and free content (maps, skins, etc.) but the process to release such content right now is pretty hands-on and not suitable for non-adults.
However, YC does not charge people to play HN in the way that Roblox charges for that game. No one is counting my minutes on HN and sending someone a payment, or a bill. There is no direct monetization of my UGC.
Mod.io is a gaming add-on (for mods) that also has no in-platform direct monetization of UGC assets. Of course, the games that use mod.io do it because having UGC at all brings the right kind of players and those players do pay.
So it is possible to make money, have UGC, and not be exploitative. I don't think Roblox can say that's where they are right now.
Free content maybe, but not free labor exactly IMO.
I feel like the exchange there is not about labor...
Now, you might argue that this does not feel like labor because it's more voluntary than labor usually is. Which is totally correct and exactly why this industry is so lucrative.
This is the reverse of the Hollywood TV model where you paid creators first and then tried to monetize the content you owned. It's certainly still labor to create it. The only things that have changed are the ownership, licensing, and payment stream.
YouTube givea you "free" labor by hosting your video.