So in other words, a developer can display menu/text in their app in this font, but is not allowed to give the user a way to enter their own text and have this font rendered for them. Am i interpreting it correctly?
No, the font can be used in any way inside the app, such as rendering a text box where the user would enter their own text. What's not allowed is the redistribution of the font outside the app. e.g. If your app generated CSS for users to paste into their own sites, then including the font as a @fontface hosted on your server, or as a data-url would not be allowed.
