Software Freedom #0: The freedom to run the program as you wish, for any purpose
Open source criteria #6: The license must not restrict anyone from making use of the program in a specific field of endeavor. For example, it may not restrict the program from being used in a business, or from being used for genetic research.
By forbidding some entities from using the software, it violates both Free Software and Open Source and makes itself proprietary.
It just replaced GNU parts. It’s a classical Theseus ship dilemma. It’s still GNU.