This is a typical token-based auth sequence. The initial sign-in sends username/password, receives a token that is used for all subsequent requests. The tokens are only valid for a set amount of time.
If there was a malicious listener on the network that sniffs a token, they can impersonate the client, but exposure is time-limited. But if there was a listener on the network who can sniff tokens, wouldn't they be able to sniff the initial sign-in request and continue to request their own tokens forever?
At that point doesn't the whole setup devolve to the equivalent of sending an irrevocable API key with every request?