FusionAuth (the company for which I work) have a similar model with a free (though, in our case, not open source) community edition for developer reach and to lower the barrier to entry.
Then support and enterprise features are paid for by the enterprise. If you can find the right levers, it works.
This has been a common business model. Redhat did it, Hashicorp does it, Rancher I believe as well. The entire SSO Tax group of companies ( https://sso.tax/ ) have variable pricing because companies will pay for features like SSO that devs won't.
The question, especially with an open core model, is what happens if the cloud providers do to you what they did to mongo or elastic. I found this article interesting: https://joemorrison.medium.com/death-of-an-open-source-busin...
I think the jury isn't out on opencore as a business model and auth is certainly the right kind of horizontal platform play. And there's certainly room for all kinds of business models in auth, as it's a gigantic market.
Disclosure: I work for FusionAuth.