It is using the existing carve out for library book lending in the physical world, and applying it to the digital world. So if the book is old enough to not be

It is using the existing carve out for library book lending in the physical world, and applying it to the digital world. So if the book is old enough to not be covered by copyright, they can distribute as many copies as the want. Otherwise, in order to use the library carve-out, they need to limit it to the number of physical copies taken out of circulation in actual libraries.