Part of the issue here is that nobody is going to build something free on top of someone else's property. What good is a "free" design if you still have to pay ARM?
Whereas once you have a free ISA which is actually in widespread use, you could get some designs out of universities or major corporations which intend to use them rather than sell them as their primary business and then release the design for the same reason they do for Linux code, potentially under a copyleft-style license.
Those designs aren't going to be competitive with the state of the art, at least in the beginning, but they don't have to be. All they have to be is low power enough to stick in an embedded device and fast enough to run the display on a refrigerator and the lack of a license fee would cause them to replace a zillion ARM chips that currently go into every IoS device and <$200 phone and consumer internet router. That's a huge chunk of ARM's market.
Then someone like Amazon evaluates this thing for something like the Kindle and finds that it's almost good enough, all they have to do is throw a couple of engineers at it for a short period of time, so they do and it gets released because what do they care of some non-competitor uses it in some cheap laptop. Commoditize your complement -- now laptops are cheaper and people buy more laptops on Amazon.
Meanwhile the "small project" uncompetitive boards start to have their own open source BSP and SDK under the BSD license, which means anybody else can fork it for their own thing, and that's a competitive advantage so it happens a lot. But now it's way easier to reverse engineer the code because 95% of it is unmodified, so you start getting community replacements for that stuff and with any luck the OEMs stop even producing it and point you to the open source repository.
It could be a long time before that takes over the high end, if that ever happens, but the low end? It's almost inevitable. And the high end is AMD64 and Apple, the latter of which has all the leverage in the world over ARM because they could always switch to RISC-V.