I think the controls in this space are such a shit show right now that being "open model" is practically equivalent to a WTFPL.
If you're trying to build an app based on SD, then not being open source matters. But seems like the majority of use cases are just "I want to run the model locally". And at that point HF can't stop me from just ripping the Wi-Fi card out of my computer.
https://en.wikipedia.org/wiki/The_Open_Source_Definition