I am very surprised that Apple allowed this on the actual App Store (and not just TestFlight), but I'm also pleased! Hopefully it will be accessible to more people now.
So theoretically it could be like an isolated computer game and have no access to anything from the underlying iOS environment. (Maybe it does let you access iOS's filesystem—it's not clear to me at a first glance.) I have the jaded feeling that this has to do with how it got approved.
https://github.com/ish-app/ish/wiki/Mounting-other-file-prov... says: "Additionally, if jailbroken or using the psychic paper exploit (not available through TestFlight nor will we help you do it), you can also mount using real, absolute paths. To do so run "mount -t real ", where is the absolute path from the root of iOS and is the location in iSH to mount the file." Which suggests that you can only touch the underlying iOS if you've done an exploit.