IANAL, but that is not my reading. They cover "Your Content" with the license grant, but not "any Content". The user still has the right to post "any Content" if they have the appropriate license to do so, but obviously they can't grant additional licenses to content the user doesn't own.
In my understanding your reading is that users uploading code that they don't own the copyright to, but otherwise have the right to copy through a license, are in violation with the ToS in general.
My reading is that the license grant only applies to "Your Content" as defined in the ToS, and otherwise users are free to upload code with permissive license and it _does not grant_ additional licenses to Github.
