Comment by mindcrime
It may not violate the OSD, but I would still argue that this license is a Bad Idea. Not because what they're trying to do is inherently bad in any way, but simply because it's yet another new, unknown, not-fully-understood license to deal with. The fact that we're having this conversation illustrating that very fact.
My personal feeling is that almost every project (I'll hedge a little because life is complicated) should prefer an OSI certified license and NOT make up their own license (even if that new license is "just" a modification of an existing license). License proliferation[1] is generally considered a Bad Thing for good reason.
Aren't most licenses "not fully understood" in any reasonable legal sense? To my knowledge only the Artistic License and the GPL have seen the inside of a court room. And yet to this day nobody really knows how the GPL works with languages that don't follow C's model of a compile and a link step. And the boundaries of what's a derivative work in the GPL are still mostly set by convention, not a legal framework.
What makes us comfortable with the "traditional open source licenses" is that people have been using them for decades and nothing bad has happened. But that's mostly because breaking an open source license is rarely litigated against, not because we have some special knowledge of what those licenses mean and how to abide by that