Wow! That seems like a mistake. This casts too wide a net and catches more than it should.
> ... product or service whose value derives, entirely or substantially, from the functionality of the Software...
Ugh. Instead of unambiguous freedom-granting terms, this leaves it up to a court to help determine this vague notion of the product or service's "value".
Steer clear of these license terms!
EDIT: deleted request for OSI to clarify