Imagine: a python formatter with an open source license that has a special clause to forbid usage by a programmer who have previously released a competing closed-source formatter.
It's rather: ... a competing formatter that may not be used on open-source projects.
The composition of both paints is a trade secret ("closed-source formatters"). The controversy is about disallowing the use on a broad class of projects benefitting the society.
Or rather a competing formatter that may only be used in one single individual's projects.