Paying customers hire developers, and developers always, always create pressure within their organizations to use the tools and software that the developers are most familiar with. A few developers in this thread have mentioned some things they've struggled with; I've spent a lot of hours reading Phabricator documentation, sussing out Conduit, trying to learn how to use the whole system well, and there are still lots of gaps in my knowledge. When Phabricator becomes too different from the workflows that developers are accustomed to elsewhere, and it isn't immediately obvious that those differences make it better than the alternatives, then they're going to pressure their organizations to not use Phabricator.
Developers furthermore are always looking for ways to build their resumé. The further away Phabricator falls from being used in big, well-known, popular software projects, the more it becomes a hindrance to resumé-building. A developer can add GitHub or GitLab familiarity to their resumé for extra credit, and GitHub public profiles are a good way to say, "Hey look, I write and ship code on a regular basis". If I'm trying to get hired, and I want to learn about integrating CI, I might have to choose between GitHub Actions or Harbormaster. One of those is far, far more valuable for resumé-building than the other.
I can't argue with your focus on paying customers, but if your developer community isn't big and healthy, your paying customers will eventually not be, either.
If Phabricator was this, there would be no reason for paying customers to ever choose it over GitHub, because paying customers generally do not care if a solution is open source or not.
But the bigger impact of this change was not a product impact at all: it was that interacting with paying customers is something I generally enjoy and feel good about, and interacting with open source users is something I generally hated and felt miserable about.
For whatever reason, Phabricator attracted a large number of users who wanted to argue with me about every technical decision, insist that whatever feature they wanted should be the highest upstream priority, suggest I should pay them for their "valuable suggestions" because they are an important CEO, take offense when I asked them to please please please read the documentation and provide reproduction instructions, bump every open task asking for status updates, etc. This stuff had a huge net cost to the project and only got worse over time as the project grew.
Writing off open source installs allowed me to stop dealing with all of this.