Does this mean they can't contribute to open-source MIT-equivalent licensed code bases? As that's basically giving that code to the public domain, is it not?
I do not find this argument very persuasive. Other aspects and of IP law and of licensing related law are different in different countries too.
If I find some software purportedly from a developer in Wheretheheckisthatistan that says it is under some OSI-approved license all that tells me is that the developer (probably) tried to license it under that license. But I have no idea if they actually succeeded in doing so--for instance maybe their employment agreement for their day job says it belongs to the employer and they are in a country where such agreements are enforceable.