It seems like a bit of weird place to be in being free software, but not open source. There are advantages to it though. It is difficult and a different type of thing to manage contributions of a large open source project. In many cases it is more work to get a contributions and determine which are of high quality enough to include and in line with the product.
Given that there are other open source alternatives and obsidian seems to have fewer problems than those, it seems like the approach of not open sourcing may have been a good one. For example, logseq started a little bit after obsidian and from what I can tell is slower, buggier, and doesn’t have a mature mobile app or sync solution. I wonder if logseq or other open source alternatives were to catch up, if obsidian would reconsider open sourcing.