Yes, the “Kee Vault servers” are essentially acting as a Cloud storage service in this regard.
I also understand the concerns of @smint and @snovak, and I’m sure they are not the only ones in the world with these concerns. If you have decided that you will never put the encrypted KeePass data anywhere other than a machine that you keep offline, I don’t expect to convince you to change that view. For the benefit of those following this thread I will reiterate that…
A) This approach is secure.
The KeePass data is encrypted using AES-256 and so far, despite over a decade of effort, no-one has found a way to break this encryption to get into a KeePass database.
Part of the reason for choosing KDBX (KeePass) as the storage format for Kee Vault is because it is established and well tested to hold up to offline decryption attacks. As with any cryptographic system, when one starts with the assumption that it’s component parts are secure, one can be confident that the final system is secure provided that those components are combined in a way that does not break any of the assumptions made by the individual components. Since KDBX is designed to be safe to share publicly, Kee Vault is secure even if a KDBX file were to be released to the public. Of course, good security is about layers of defences and you can see from the other information about Kee Vault and its source code that other layers of defence are also in place to further increase security.
If you really are able to keep your locally stored kdbx file hidden from the rest of the world forever then you are exceptional (some might also say an optimist). For a lot of people though, what matters more than keeping the encrypted data in a secret location is the security of the data itself, such that if (pessimists may say when) the data is exposed, there is no way to decrypt that data into a form that reveals the secrets (passwords) protected within. As explained above, KDBX has inherent protection against this risk.
Break KDBX encryption, AES, SHA-256, Argon, etc. and all bets are off. Although with that power, why the attacker would target your kdbx file over all the other government, military, financial and commercial information available to them is an interesting question. We all have different perspectives on the relative risks and benefits of any security system though and I completely respect that some people feel this is a realistic attack scenario that they must defend against by any means necessary. As I said, I’m not here to try to change that viewpoint.
B) Nothing is changing regarding Kee and KeePass except that if enough people have a different view to you and decide to support Kee Vault financially then you’ll benefit from some of the improvements to Kee that are paid for by those people.
I’m happy to continue discussing the security of the kdbx format and the protection that gives against decryption if/when the encrypted data falls into malicious hands - some of the theory around this risk, both technical and anthropological, is fascinating. That said, I can’t dedicate much more time to that topic in the short term and such discussions should probably be split off into a separate thread, or potentially onto the KeePass support forums. Feel free to do so if you wish.