Been using Kagi for two years now. Their consistent approach to AI is to offer it, but only when explicitly requested. This is not that surprising with that in mind.
"Kagi News reads public RSS feeds of thousands of (community-curated) world-wide news sources and utilizes AI to distill them into one perfect daily briefing."
A daily briefing is AI generated does not communicate all articles are AI generated. And the standard for news publishers to disclose reasons for distrust is every article.
I think it's generally understood among their users (paying customers who make an active choice to use the service) but I agree—they should be explicit re: the disclosure.