Of course it's not binary, there is a gradient. Proprietary doesn't always imply evil. In fact the Linux kernel includes proprietary software in the form of blobs and I don't mind very much. I'm also very glad for example that the computer history museum is publishing ancient software, even if the licenses don't conform with the four freedoms.
The question is how much of a problem it means in the end. How complex is the proprietary piece? How replaceable? How well is it confined? Does it impose any restrictions onto my behaviour or use of the device/service/etc?
The thing with open source is that it's unpaid contributions. People work on your thing, making it better.
Now when you put a source-available licensed software out there and ask for contributors, what you are saying is that you want people to have a major disadvantage compared to you, in addition to all the advantages that you as maintainers already have. I'm not sure whether the allen institute asks for contributors on this or just puts it there to satisfy your curiosity but I wouldn't work on it for free.
The allen institute's main goal is to advance science. It's fine if their stuff is proprietary, they'll do a good job then as well, but if they want to be in the open source community they should accept its rules and not make their own. Ultimately, the act of putting it out there is great and maybe one day they'll change it. We've seen Microsoft undergo the same transition.
Caring about the license is very important. The four freedoms aren't so important because of inertia or dogma but because of pragmatism. They include the very minimum, the very core of what makes open source software open source.