Does the MEA act as a catalyst or is it chemically consumed during this operation. I could do the same thing by hiding blocks of pure zinc and pure copper in the box. Add impure water and you get the equivalent of the "potato battery". That electricity can be used to break water into hydrogen and oxygen. The problem is that the copper and zinc are combined with other elements to make other compounds. (Sorry, I'm too lazy to track down the exact reactions). Once the pure copper and zinc are consumed the electricity stops.
You hit the nail on the head.
I think it's unlikely that they're using an alkaline metal reaction like this, though, because you'd burn up the metal really fast. You can probably extract some decent power from it, but your total energy capacity would be tiny. You could go really fast (especially in such a small car) for, um, half a mile. I can do that with a bullet. :)
If their little fuel plant is powered with some energy input, though, then it's just performing an electrolysis reaction. Whoopie. It's not a bad thing per se, but it's important to recognize that it's not "powered by water". It's not even powered by hydrogen, per se. It's powered by electricity, and is using water as a source of hydrogen, which it's using as an energy storage mechanism. In other words, the hydrogen tank that holds the water electrolysis products is just a battery of sorts. But, of course, that's what all hydrogen fuel-cell technologies are.