They can freely include Apache2 licensed code in an AGPLv3 project without having to re-license the entire project under Apache2 as it's not a copyleft license.

They can freely include Apache2 licensed code in an AGPLv3 project without having to re-license the entire project under Apache2 as it's not a copyleft license. However this doesn't make the code they included AGPLv3, that code remains Apache2 and must be declared as such.