That is proprietary software. Source code by itself is useless when you have no rights to go with it. This is why "open source" is such a sly term. Companies can very easily pull off shenanigans like in your hypothetical scenario and then hide behind the banner of "open source". They would also technically be correct, even if not abiding by the OSI. After all, it sure as hell isn't closed source!
Free software, so long as you specify "libre" or "free as in freedom", is unequivocal. Bullshit like freely viewable source without distribution rights doesn't cut it.
Your views are misguided, and are even potentially harmful.