Not at all, really. Forking is fine and building a business off of it is fine (I don't personally see the value in it but apparently Y Combinator saw fit to invest in this so what do I know). Where they fucked up was replacing the existing free software license with some "AI" generated mumbo jumbo, because they were "too busy building" to "bother with legal."

You didn't have to "bother" with creating a license, because there already was one. No one in free software should be rolling their own custom license (GPT generation aside) because there exist perfectly good ones already.