Thank you, that is a good find. The other person I’ve been talking to hasn’t been able to cite anything from them. I’ve updated my top-level comment with this info.
Interestingly, I wonder if they distinguish commercial use from commercial distribution, which the author is talking about. Not allowing someone to use the software as a business is very different from not allowing them to sell it as a product.
edit: Reading more into this, I do think this is about prohibiting use of software by commercial entities, not prohibiting entities from selling the software. Apparently this is actually a point of disputation within the community, with people like Richard Stallman insisting that you can prohibit commercial redistribution and be Open Source.
This makes sense as to why Clause 1 only asserts that it must be freely-redistributable when bundled together with software from other sources.