Does this app hack WiFi passwords?

No. The WiFi you find on the Instabridge platform have been added by users like you and me, the Instabridge community. Hence, the app does not hack, it is the users that manually add WiFis to Instabridge that you are then able to connect to. If a WiFi has not yet been added to Instabridge you yourself are able to add it if you know the password and are within reach of the WiFi signal.