The money making part of vmware licensing is the baremetal hypervisor ESXi, the competitors are xen or hyperv and the likes.
The lock-in part of vmware is the vsphere management software, that allows you to move VM's en mass from one baremetal machine to another baremetal machine, or allows you to nest vm's, etc. manage your entire fleet of vm's which could be thousands or hundreds of thousands of virtual machines, from one management interface.
it's basically docker except it's actual entire vm's being moved around. VMWare ESXi being a baremetal hypervisor means you can run different OS's on top of these vm's and imagine being able to move these VM's all running different OS's around in your ecosystem.
That's what people pay the big bucks to vmware for.
It would be very difficult to build the vsphere/esxi ecosystem with pure opensource tools (it's possible with Xen, etc) but you'd be right back at paying some vendor a massive amount of money for building, integrating, and supporting this kind of system. (Redhat will happily sell you something that approximates vmware's tools, for megabucks).
As an aside, the consumer "vmware" software that you install on your workstation is such a small portion of their business, they basically spend no money on fixing/upkeeping. Apple silicon support was in beta for a loooong time, and they don't actually care about their workstation product. ESXi makes the money.