If those are the rules, then the risk is too high for corporations to trust strangers, they shall have to stop using FOSS, the ecosystem collapses (because nobody can build on an untrustable system), and the FOSS experiment fails (in the sense we're back in the bad old days of closed software and while people can develop with FOSS, no same user would trust it for use). If my company has to be responsible for every line of code, we may as well own them.

I'd argue that he very much did break the social contract. Not the letter of the actual contract, but it's generally assumed FOSS developers aren't in it to screw consumers of their offerings actively. That's the social contract that's the lifeblood of the movement, and if it breaks in the general case, the movement dies.

(There's a lot of things people can do that they're perfectly entitled to that would destroy ecosystems because they shatter expectations. Linus could sneak a very clever backdoor into Linux [hypothetically, perhaps not without collusion with multiple actors and a lot of prep work], and he wouldn't break the license but he would severely injure the project's reputation).