A better choice for the title would have been "Winamp Legacy player source code is now available".
>its source code was opened to the community
I find it hard to believe that any serious person would argue that "code that is open to the community" ≠ "open source code".
I think it's realistic to assume that the developers who wrote the README, and the lawyers who wrote the license didn't talk to each other much when making decisions about how much freedom users were going to have with the code.
It's also mostly about getting that lovely free dev work because with oh so many capable devs out there they're just going to be clamouring to want to give up anything where possible to be able to work on this along with trying to appear to be doing good. Even though they've halted development at least 3 times I'm aware off & ditched a number of dev teams under their 11yr tenure of ownership.