There's a Linux kernel and systemd in the 'i3'. See the links in the first few sentences of the article.
> which they are then distributing
BMW is a Bayerische Motor Work, a car company that distributes cars
> and are refusing to distribute the source code for their modifications?
The letters from BMW to the people asking for a copy of the source, stating they are refusing to distribute the source code for their modifications, linked to in the article.