This is covered in some detail in the terms of service, most specifically the license grant to other users in section 5. The gist of it is that by publishing a notebook, you agree to allow others to view, fork and import it into other notebooks.
Importantly, this license grant only applies to usage on Observable. If you want to allow people to use your code outside of Observable, say to copy-and-paste your code into their app, then you should associate a LICENSE with your notebook.
We haven’t yet established a standardized convention for declaring a license, but I’m imagining something like what you see on my Altered World notebook which uses MIT-licensed code by Gerard Ferrandez. It has a cell named LICENSE whose value is an SPDX short identifier, and a comment containing the full license text.