It works by allowing the project to deal with honest people and ignore assholes efficiently.
And for a small team (in this case, one person), getting rid of assholes who just want to rip the project off with minimal effort is a big win.
After all, if you just want to play around with the system you are a hobbyist and can get it for free anyway. Why go to the extra effort of stealing the code?
And if you actually are creating value with the system, don't you think you might want some support?
If your answer in either case is that you would rather cheat the author then there is nothing tangible stopping you, but you just defined who you are and selected yourself out of the class of people the maintainer has to deal with.