All data is encrypted and only decrypted to start the node in memory; nothing is on disk. But yes, this is similar to any hosting provider. If one has access to the machine and can read the RAM one could find keys. This gets a bit in the direction that if you don't build the software stack yourself and ideally build the hardware yourself nothing can be trusted. You might not use a hosting setup for your bitcoin stash - that's probably on a hardware wallet from a trustworthy vendor, potentially in a multisig. But it's a solution for your accessible lightning wallet to do all the exciting lightning things. Generally I guess the hosting is a bit comparable to voltage. Phoenixd also goes in the direction of an always-on, server node (afaik they don't encrypt the seed on disk).

We put a lot of work in to make it possible to run the Alby Hub everywhere that users can choose what works for them: this can be a Raspberry Pi Zero (some $20 hardware!), your desktop computer, your own server (e.g. we have docker and one-click deploys for hosters, too), etc.