> I still need to read and see the agreements myself.
See the 'termination' section of the enterprise agreements from the Red Hat licences page.[1] What constitutes a material breach is specified in Appendix I from the Product Appendices section, and it includes the redistribution of software obtained through the subscription (sections 1.2.f and 1.2.g of Appendix I).
> How this is ethical, and allows unimpeded distribution of FOSS code?
It is designed to discourage the distribution of the code while keeping Red Hat in compliance with the GPL. So it cannot prevent the customer from exercising their GPL rights, but a continued business relationship with the software vendor is not something that the GPL protects. PaX/grsecurity had used a similar tactic with their Linux kernel patches.
Isn't this limiting in a legal and practical sense?
How this is ethical, and allows unimpeded distribution of FOSS code?
Also, I still need to read and see the agreements myself.