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> That doesn't make this situation any less bad to the rest of the community.
How is the community suffering here? Let's say Element adds a bunch of baller stuff to their versions over the next few months and then closes the source. Can't the community just fork the last AGPL version? You might say, "well then no one can take the AGPL fork and make their own closed-source business", but do you want them to? Even if you do, they still can with the existing Apache-licensed version, just like Element is doing right now.
You're arguing that Element will lose a lot of contributions, but TFA points out that despite being super open, the vast majority of contributions are still made by Element employees (which seems to be true [0]). It's not the case that Element is looking to monetize the (small) contributions of others, it is the case that others are looking to monetize the (huge) contributions of Element.
And besides, aren't the MSCs the core of Matrix? It's already super possible to build your own compliant client and server.
The situation is that Element needs money to keep developing the ecosystem. It would be cool if there were a big network of donors and contributions, but there isn't. You're essentially saying, "that's fine, go out of business then, and the community will keep developing the ecosystem", but that's not happening now, and it can still happen anyway with the Apache-licensed versions, which again people can still contribute to.
[0]: https://github.com/matrix-org/synapse/graphs/contributors