If the temperature in London drops to zero, yep, the game will be free. (Sorry, you don't get money back if the price slides into the negatives.) The developer also invites you to switch to Fahrenheit if you really want to (that'd put the game at about $30 at the moment) or even Kelvin ($282.55!) if you're feeling especially generous.
This clever pricing system is only available on Itch.io, [...] It is also on sale on Steam until March 7, but that price doesn't fluctuate.
I thought steam had some sort of t&c agreement where you had to price all copies of a game the same no matter the store they were on. surely this would violate those rules. or am I misremembering that?
It would, but Steam only kind of enforces the rule. They seem to enforce the rule if there is a significant and constant history of pricing a game lower on another platform (eg Humble Bundle)