Is it short-sighed? If you think they will go down in market share from now on, yes. But Hashicorp probably thinks it won't or it wouldn't have made the change in the first place. For them, it's all the way up from here.
There same logic applies to users; at this point, I have to assume that the only reason that Hashicorp is providing anything to people who aren't actively giving them money is to try and get money from them later. This is also one of the reasons I'm abandoning them ASAP; now that the money squeeze has started, it's not like they're going to stop.
At some point third party and independent module and provider developers will need to decide whether to cross-support both tools.
I don’t think Hashi is going to go out of their way to make life easy for Terrafork. Cross-compatibility won’t last long.
So it _seems_ (the word I used above as well) from my perspective that they’re giving up a bunch of soft power for little gain, but it's very possible that I'm either wrong about the value of the soft power, or wrong about the cost of running the infra.