From what I've been able to glean, it's a one time price. The release loss leader is $1.99, but that will go higher. Authors submit a spec and two installments of roughly 10,000 words each and the estimated number of installments for completion. I'm pretty sure they don't want the full work as they make specific mention of dedicated message boards allowing authors to interact with readers and adapt the story based on feedback.
This is not part of KDP, it's Amazon acting as a "trade publisher." That's a pity because serials are doing very well on KDP and the $2.99 for 70% commission thing is a real buzz kill for them.
I see the whole thing as pretty flawed other than as a PR gimmick. The great thing about a serial is that it's open ended. You don't want to be locked into an early one time price. That actually encourages you to wrap it asap, even if its doing well, you're having fun, and the plot is dragging you in longer directions. I don't mean writers will walk away from it without completion, but this is a business. If you priced for a 50k novella, you might add a couple of installments, but you're probably not going to go all Game of Thrones with it. Instead you're going to have the silliest thing imaginable, a sequel serial to a serial.