Not quite, it‘s only restricting competitors and so all companies and home labbers can still use it for free and contribute as in free speech.

However this can bring a lot more financial sustainability to a project. I don‘t know the specifics, but the main problem is that companies make profit of the software, but don’t invest enough money back into the product. This cannot be good for users. Open source must be financially stable.

Also right now all those competitors (and users) can create a fork and maintain it. So it is up to the community what will happen to the project.