Earlier quoted context omitted.
Don’t think it’s targeted at Vault. Vault has APIs so in the enterprise, you can self host and a vendor can manage vault through the APIs. Terraform specifically is built CLI only in the OSS so you have to repackage the underlying binary and hence are subject to the license as a vendor.
that's the most puzzling bit. Do they not want to anyone offering anything that could compete with any of Hashi's products to be able to use terraform binary at all? if so, that's similar to proprietary programming languages. Not a thing. The community can just agree on a similar but open alternative and the original company is left behind. That's why all languages and frameworks are open-source with permissive licen…
I think they want to make it difficult for SaaS products that embed terraform (or an altered version of terraform I would assume where they have built APIs) in their product. That said, customers can install terraform so you can still hypothetically have an "integration" with Terraform where you call the raw binary (like Atlantis). So basically, they want terraform cloud to have a "privileged" user experience is my guess.