The downside to this approach is that you need to get copyright attributions for anyone who submits code to the project. This is often a fairly large barrier to entry for contributors and I suspect that the author will continue to have poor engagement for outside contributions.

Now, from a practical point of view, that may be perfectly fine for him. If he's not getting many contributions anyway and doesn't really care about it, funding the project through license sales can make sense. Sometimes I think people don't think about the trade off that's required, though. I've seen people get frustrated with the lack of outside participation.

However, I agree with you. In this case, it seems like a smart move.