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I dont fully understand the context here. They wont give you an encrypted tunnel unless you're paying for PRO?

If true, This defeats the entire point of this tool imho and I will not pay for such a basic feature.

It's always been this way, you just need to use it with a reverse proxy. inlets OSS doesn't have the features to add TLS to your websocket.

The change just makes it more obvious to people who were using it without reading the instructions

It says: you probably need encryption, so set up a proxy, or get the PRO edition to do it for you. A reverse proxy is easy to configure and how most OSS users use inlets - this project has 8k stars, and lots of downloads.

It turns out that developers don't mind setting that up themselves.

it's so easy to build encryption into inlets oss. and the license is really really friendly to do so. if you really want to use it pay the author or do it yourself.