The Bitcoin ATM will also serve as the exchange, which eliminates the need for customers to exchange their coins to fiat first before using it to purchase whatever they want, but for the Bitcoin ATM to do that, they will definitely charge fees, which is common in every business. In terms of hacking the ATM and customers funds being affected, I think the ATM owners will be the ones at greater risk in such an incident because the hacker will target the system, and customers only go there to make use of the machine. I don't think their data will in any way be saved in the machine for the hacker to steal their funds from there.
It is less similar to a traditional exchange, but you of course can buy and sell your bitcoin through Bitcoin ATMs.
I say it is less likely an exchange if you are strictly, because you purchase bitcoin through the Bitcoin ATM operator, and sell your bitcoin to Bitcoin ATM operator, that's all. You can not buy and sell your bitcoin with any other Bitcoin user or trader, if you don't consider Bitcoin ATM operator as either an investor or a trader. They as Bitcoin ATM operators get money from Bitcoin ATM fees that are very high and expensive for Bitcoin ATM users.