Interesting, I understand where they're coming from, but as others have said, I still feel like it's shady to keep calling it "open source" when open source is already well defined.
I think they have a noble mission, yet I can't really say I like their means. Maybe in that "finding a middle ground", since they're mostly making consumer software, a lot of that payment part could have been covered by simply providing their releases under a payment on the app distribution channels (Play Store, their website, others?), most people that would pay would do so to avoid going through hoops to get the app for free through other means. That way they could have afforded to be actually open source. Maybe it wouldn't be as effective though, I can't know for sure, at the end of the day it's a battle of ideals