In this I'm mostly concerned by the extremely vague description of what is it you can't do with this new terraform commercially. You can't "compete" with hashicorp. Well, if I'm doing devops consulting and I write terraform for clients is it competing with hashicorp? If not, what if they start offering such service tomorrow? Will it be competition them?
Personally, speaking figuratively, I think they just pulled a shotgun and decided to shoot both of their feet off. As someone doing devops consultancy since well before terraform became a thing I'd have no problem at all going back to custom python code with configuration in yaml if the clients decide its better for them.