You're just trading your trust in a company to a trust in an organization of loosely affiliated individuals. I don't know C, so Linux being open source makes zero difference to me. I couldn't change it if I wanted to. I couldn't inspect it even if I wanted to. I couldn't run it for whatever purpose I want, only for whatever purpose people who know better than me have allowed for. And I can share the software, but the people I share it with will likely have the same limitations as me.

I'm still dependent on Intel providing the drivers for their wifi chips. I'm still dependent on AMD/Nvidia providing drivers for their video cards. I'm still dependent on a lot of non-libre software that I need in order to do my job.

All of your points are important from a theoretical standpoint, but that's based on the idea that the end user actually knows how to do any of that. And those skills are very, very uncommon.