No it doesn’t. Anyone can take AGPL code and wrap it up as a SaaS. AGPL forces you to publish changes even as a SaaS which GPL does not. But that doesn’t close the AWS problem that Elastic and others faced.
The "loophole" is that you can modify and use the software without contributing back your changes. This has bad economics because then someone can take the work you've done, add 10% more effort to make it 10% better, and outcompete anyone else because their thing is 10% better than the free thing even though the original authors did 90% of the work and are still carrying most of the maintenance burden.
People using free software for free is not a loophole.
People using free software for free is not a loophole.