Yes, you can use it for commercial and non-commercial games completely free!
Is it really a game engine?
Short Answer: For common purposes, sure, you can think of Monogatari as a visual novel engine
Technical Answer: Monogatari is a web development framework created to build modern websites that just happen to be games, it lacks quite a lot of elements to be considered a real game engine as it is only using an already available platform: your browser.
