There is indeed a block in that diagram labeled 'Transmitter', but it is not a transmitter in the colloquial sense of converting onboard power into RF energy. Instead, the 'transmitter' modulates the amount of ambient RF energy that is backscattered, by modulating the antenna impedance.
This appears to be the major innovation in the paper. As lots of commenters have pointed out, harvesting power from ambient RF is nothing new (whether or not a battery is involved).
(Section 3.2): "By modulating the electrical impedance at the port of the antenna one can modulate the amount of incident RF energy that is scattered, hence enabling information to be transmitted."
(Section 8a): "backscatter communication is two orders of magnitude more power-efficient than state-of-the-art radio communication")
Yeah, it's a cool technique. But it still has no room to scale as far as I can tell. At least not for transmitting inside licensed frequencies ... maybe they should try it out on 2.4 GHz or 3.5 GHz??
EDIT: I should say that yes the technique is using analog conditioning circuitry to get the job done without storing power in a battery.