No, it is "end to end" encryption exactly as they claimed - one of those ends is their datacenter where the data is processed.
As per the description from the linked blog:
"End-to-end encryption", or E2EE, is a method of securing data that ensures only the sender and their chosen recipient are able to view it.
The "chosen recipient" is Kohler's datacenter, so it's behaving exactly as claimed. The application functions by processing the data on their servers, which is also why a monthly fee is charged to provide the service.
You could theoretically avoid this by transmitting the data directly between the camera and your device, and doing the processing on your device, although that might not be practical
There are many much worse examples where data is routed through hosted servers unnecessarily, typically as a kludge to get around NAT restrictions.