I mean... that's fine if that's what their business requires. It just isn't open source. It's "source available" or "shared source" or something. And there's nothing wrong with that, as long as everybody is up-front about what it is.

Edit: to qualify what I just said... I obviously only mean that IF their license doesn't also allow distribution of patch files. You can be OSI compliant and not allow distribution of the modified source as a "whole" so long as you allow distribution of the patches needed to get to the modified source. I didn't notice at a brief glance where the "new" (or old) Timescale license falls on this point.

Yes, it is necessary to prevent the core purpose of open source.

Which is fine, proprietary licenses are a valid option. Just don’t pretend it's almost open source. It's a source-available proprietary license designed to prevent the kind of exclusionary rent-extraction whose absence is central to the value proposition of open source.