It just felt wrong, thanks for letting me know. Seems weird to run an orchestration system in another one. Fly wasn't meant to be a VPS / server host and using it as one seems odd to me.
I don't work for fly, but I'll say that while the end-user of fly.io isn't expected to run an orchestration system, fly.io themselves runs an orchestration system (nomad from what I can tell), so it seems like a fairly reasonable idea for a take home evaluation for an infrastructure role at the company to evaluate skills/knowledge about orchestration systems.
They posted maybe 6 months ago that they were migrating from Nomad to K8s (and expected it to take a while) so it's possible they're not on Nomad anymore.
The orchestration system you're talking about is Nomad. We run a huge Nomad cluster (we're in the process of moving away from it, but it's one of the harder parts of our infrastructure to wrangle).