What does it matter if they do? The point of the AGPL is that if you make a version available to users over the network, either you release the source to your version or you can't use it. That subsidiary could still be made to release the source or stop using it. Wouldn't that be "mission accomplished?"
I don't know if that scheme would work but I think "not battle tested enough" is valid.
Also there's some weirdness in how the availability requirement applies at the time of editing that gives me questions, but I'm far from an expert there.
I think a plain read of the license would make it clear that the "distribution" obligation occurs when you make it available on the network to your users (regardless of whether you modified it yourself or paid a contractor to do so), but I'm not a lawyer, so sometimes what looks like plain text to me can have a specific meaning that doesn't make sense to me.
Starting with no trickery, there's a lot of circumstances where you could buy software from a vendor and confidently declare you didn't modify it. And that should be true even if you ask for certain features just for you. So there's probably a way to make the separation work.
My view is that if Amazon or Apple lawyers thought they could bypass the AGPL that easily, they would've done it already (just look at the stuff NVIDIA does to pretend that it's not flagrantly violating the GPL).
> I suspect a judge would not look kindly on such shenanigans in any case.
I completely agree there, but they still need to find the license clause sufficiently correct and in scope if they want to throw the book at you.