Can the patch / new code be copied to this version without violating anything or does it have to be some sort of “clean room” patch where you only read the bug report and not the actual fix
That's why they are saying it's not an "open source" license anymore – because it's not. Source available means just that. You can read it (say for the purpose of figuring out some annoying bug so you can contribute the fix upstream) and you can probably build and run it, so long as your use is according to the terms granted in the license. But you can't redistribute it, any copy you take probably isn't yours, and it's only usable according to the terms of the license.
Perhaps 'derivative works' isn't the right term. I know there's some exceptions for copyright when there's 'one way' to do something, or something that substantially is not a creative work, such as a function that adds two numbers.
There being one right way to solve a problem, doesn't really change whether a bit is copied or not. If you have a bug and there's one right way to solve the issue, then you don't need to copy the original. You can reproduce the bug and solve the issue, and any similarity between the independent solutions is coincidental.
If you take the source code and accept the new license terms, I think you'll be bound by the terms. I am not a lawyer and I haven't read the full text of the BUSL-1.1 but I will now, since that's probably the best way to understand what the license does or does not do.