I don't want to come out strongly in favor of payment-for-order-flow (the term for RH's relationship with HFTs), but since you seem so incredulous about it, let

I don't want to come out strongly in favor of payment-for-order-flow (the term for RH's relationship with HFTs), but since you seem so incredulous about it, let me offer the non-cynical explanation to help build intuition: RH traders receive better prices than they otherwise would because RH routes their orders to specific dealers. RH is paid for this, and theoretically passes on some of that payment in the form of commission-free trades. It's more complicated than that (even defining "better prices" is an unsolvable problem), but if you take that at face value, it's easy to understand by the practice isn't immediately regulated out of existence.