This is the result of the way in which English uses ‘would’ and ‘could’ - both can be conditional, or used in past tense. ‘When they were young they would swim every day’, or, ‘When they were young they swam/used to swim every day’ are all commonly used.’ 

While confusing, it is important to know that ‘would’ and ‘could’ in English are translated differently in French, depending on context, which will usually be clear.

Hi Stephen,

"Ils nageaient...."  is imparfait because it is a repeated and habitual past action.

When in English we use "would" in this context, we are expressing what we used to do habitually in the past.

This matches directly with "They would swim ....."

There is no condition being set in this case.

Bonne continuation.

Jim

Maarten is right: it all hinges on the dual use of "would" and "could" in English:

I would go there, if I could. -- "would go" is the conditional as it expresses a possibility.
In my childhood, I would often go there. -- "would often go there" is not about a possibility but expresses a repeated action in the past.