Makes me wonder what they thought they were going achieve. I'm assuming it's based on a Linux distribution?

I guess when your entire nation is a state controlled echo chamber it's easy to just think that criticism of your code is just jealousy of your achievements.

GPL'ed code is probably legal in this case, because they don't distribute publicly. It would be a decently easy case to make in an international IP court that distribution within North Korea is not a public release. However, if a North Korean citizen demanded the source code for Red Star, they may be obligated to provide it, lest they are in violation of the GPL.