In true sugar relationships, there's a degree of exclusivity. She's not sleeping around and managing multiple partners and flipping dicks on a nightly basis like a prostitute. Authentic sugar relationships usually last for years and there's a high degree of feelings, if not love, involved. Usually the woman has another focus in life (career, hobbies, whatever) and the guy is in a relationship or too busy to commit to one, and it works for them both. Sure, <deleted> usually hits the fan at some point because someone develops feelings, but the lady isn't a prostitute in the sense that she's selling her ass to multiple men on a frequent basis. She's giving up her body for a financial renumeration, but I'd argue many "sweet" Thai ladies who find their western man as a way out of Thailand are doing the same. It's a trade-off of lifestyle for companionship - she's willing to fill his needs, and he's willing to take on her as a financial obligation in life. Go to my home country and you see plenty of Thai women who are attractive with men who are easily below them in looks, but the situation works for them. And ten times out of ten they met in Thailand (or Vietnam), he's older, less attractive, but she takes care of him and he provides for her.
So yes many of these women in Thailand sell sex for money and that's just prostitution. However, there are different arrangements out there for women who don't want a commitment, but like the money/lifestyle and don't want to have sex with ten guys a night or week to get it.