I think there's a swath of Terraform users (likely minority) who find themselves in a legal gray area, or a legal black-and-white area, where they're directly at risk. Even if Hashicorp never intended to target small startups with this, the wording of the license unfortunately applies and is enough to make anyone nervous.
I think MongoDB had a similar issue when they went source-available, they seemed to intend to only protect themselves from big tech but unfortunately a lot of smaller players got spooked. I think (?) it's fine now though