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I don’t think a business would actually do that, if they purchased something they would likely not put it up on GitHub immediately, but I think the key to selling free software is customization. Red Hat makes a good deal of money from free software, but as you say, much of that is from support.

It's almost like 2.9 billion dollars of annual revenue incentivises RedHat to make worse software, to encourage people to buy support.

Hah, what am I saying, ignoring incentives like that is easy and commonplace, I'm sure they pay it no mind at all.

Also, many "small" programs don't require support because they are very simple to use.

You can probably make money by selling Windows binaries of OSS software. See ntopng, where compiling on Windows is not that straight forward as compared to Linux.

Most companies don't survive on selling software anymore either. Look at Adobe. You can't buy their products, you just rent them.