"So, it looks like we'll get a more liberally licensed Quickwit, but reading between the lines suggests development of it is might otherwise be winding down?"

They will stop fulltime day-to-day effort in it themselves, probably because they have been relocated to writing a similar service but closed and integrated in DD, but it seems they want to opensource the current product with a OSI compliant license in the hopes that the community picks up the tab.

I think that's a nice trade. Could have been much worse.

By the way, also note that DD is not a total stranger in the OSS space. They actually opensourced their observability pipeline tooling for general use as Vector, which is a rock solid product. - https://vector.dev/