Earlier quoted context omitted.
Anyone is welcome to use my code in a proprietary piece of code, indeed the Apache2 license allows it. What it doesn't allow is for my code to be re-licensed to AGPLv3 nor can they grant themselves a license to do whatever they want (their CLA). So indeed they could keep importing Incus bugfixes and new features into LXD, but that code would need to have an exception carved out in their current contribution requireme…
I guess you already thought carefully about all this, but wouldn't you actually prevent them from reusing your code (in a closed version) if it were released under (A)GPL? Because if you keep releasing your code under Apache 2, you prevent yourself from taking their code while allowing them to take yours. You could lose at this game. If you released under AGPL, you would reverse the direction. They would not take you…
Still permissive enough for the goals of Incus and for anyone using it as a component. You can even use the LGPL code in the AGPL build of LXD fine. But if they want to release a proprietary build containing the LGPL code, the LGPL code needs to be held at a bit of arms length, so it could be used as a library in proprietary code for example, but couldn't have patches intermingled and incorporated wholesale into it.