How can they charge for something self hosted per minute? Thats very weird to me. If I run the software I should pay a single time only, if I don't own it then why self-host im the first place?

Maybe this is designed to scare people away from self-hosting altogether?

I do believe, this is to disincentivize self-hosting for smaller-medium workloads. In essence, they're saying that if you're small, you should just use their Linux 1-Core, but if you're medium-to-large you won't care about the high cost.

It is a way of increasing lock-in for smaller-medium clients, without driving away their medium-large ones.