I actually agree with Red Hat's decision to not make their sources publicly available to non-customers, and I think this is a good example to set for free software companies. However, this quote shows a fundamental lack of understanding of what free software is. It's not a "threat to open source companies everywhere"; it's a feature. It's the horse you rode in on.
The SFC has suggested this, and Alma Linux wrote about their understanding of Red Hat's terms, but it seems that Red Hat may terminate contracts with customers who redistribute their sources. I think that's quite nasty and very much disagree with it. Grsecurity already does this, and my opinions about that company are the same. I thought it was interesting that Red Hat didn't address this at all in their post...