Well, in the first few seconds of the linked video they even tell you what REC stands for: Rental Equipment Currency. These sims will continue to be available to every player once Star Citizen as a whole is released, exactly so people can test things out before spending their UEC. They'll have events and tournaments and such -as they say in the video. But they are sim events your character takes part in, as an avatar of your character. They take place within the area of a single map with varying rule sets. The sims have numerous modes like Swarm, Co-Op Swarm, Deathmatch, CTF style, etc. But Star Citizen isn't a collection of 1 map deathmatches slopped together, it's a whole galaxy where these modules come together seamlessly without a time limit or some match score. You'll know you lost an engagement when you wake up in a recovery wing of the nearest hospital, or limp into the nearest port for repairs after surviving, or have to choose a successor once you've racked up too many deaths to make reviving possible.

I guess I'm starting to see where the confusion is coming from; this has all turned a bit Inception-esque.

The only thing you need to remember from all of this is that AC (the dogfighting module) and SS (the FPS module) are games within the game. In the near future, we will access them from the hangar via the Sim pod -linked from Sandi's Facebook previews. They wanted to give an in-fiction explanation for why these isolated pieces existed. So if you want the feeling of being back in this Alpha / pre-Alpha phase of Star Citizen's development after its release or when beta hits, you could just limit yourself to accessing these sims from your hangar. Right now there's nothing to fly out into from that hangar, hence the fictional approach to justify it.
Most people who've been following from the beginning will say it is a bad move to rename AC + SS to SC 1.1, specifically because of the confusion all of this seems to be causing. People are coming to Star Citizen thinking these modules are what the game is going to be when it's done; that is not the case. These modules are for testing along the road to the persistent universe and Squadron 42. Since they'll remain useful well into the future, they got built up into their own thing and acquired fiction to support their existence. Another up-side is that anyone, anywhere in the game universe, wherever their Hangar may be, can access these sims and compete / try things out with anyone else who's connected, in pre-defined maps.
I've been following SC's journey since the place-holder question and password went up around October 2012 iirc, so it just kind of seems plainly evident from my perspective. I guess they might need to clarify things a bit more on the homepage. Hopefully this wall of text helped clarify. Now I need to go have some tea and relax, too much thinking :(