How does the business model relate to the source-code being published under a Free Software license?

I don't see how the license of the software relates to it it giving you a shitty experience or not.

The shitty experiences I had on Android were largely due to carrier and OEM spyware and bloatware preinstalled on devices -- deals Google struck.

I had always attributed the security problems to Google having inadequate terms with handset manufacturers, to keep handsets up to date. Specifically, that handsets could automatically fall back to stock Android if the OEM/carrier didn't want to continue to develop their proprietary fork for that line of handsets. Maybe this is wrong. Maybe it was planned obsolescence with unintended consequences.