it's not uncommon for Open Source projects to rely on non OSS services. the project itself is Open Source which is where the designation comes from

as far as free, it's absolutely free to spin up. it does require registration (like any other service), but Cloudinary has a generous free tier. it was made pretty clear on the website and repository it relied on that service

just for transparency, i work at Cloudinary, but I stand by the above whether it was Cloudinary or another service