Yes, which brings me to my original point - that this is nothing new. It's called 'shared source.' The idea has been around since the early 90's and Microsoft has employed it as part of their government security program since 2003 (because governments need to view the source of a product to verify that the product is secure and there are no corporate backdoors installed.)
Unity also uses a shared source model, to an extent. Users of the free edition of Unity do have limited access to the source by default, while pro users get full access. I am sure there are other engines out there (Source, perhaps?) that operate on a similar license.
Fuck 'em. They can only legally stop you from using their trademarks and their assets. You can make a similar game using all-original assets and call it Unactual Competition
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