Earlier quoted context omitted.
You are misreading it. Software = Keyframes software. Your Software = Whatever you are releasing. So basically they are saying you can't redistribute just the Keyframes software library by itself. Which also means, if I understand this right, you can't fork it and modify it either. I agree however, not a good license.
I'm not misreading it. The license says we cannot fork the software. That's not open source.
Open Source need not be free as in beer, nor as in freedom.