Providing the source of a closed source project to an adversary so that they can break your software is nefarious.
If the author's justification was...
"My crypto implementation is perfect. There are no bugs in my code, so providing source code (which the user community does not have) to an adversary does not have any effect on any user's security."
...then the author is simply incompetent, not malicious. But I am not inclined to accuse the author of such incompetence.
You might be the only person around here to ever try that argument in public.
Most people who argue that open source is equally or more secure than close source software do not argue that access to source code provides zero benefit to attackers. Instead, they argue that the benefit gained by the many additional sets of eyes belonging to researchers and other "good guys" outweighs the detrimental effect of letting the "bad guys" see as well.
The question in this instance is not whether the closed-source-superior or open-source-superior security camps is correct. The only related question is: "Does access to source code provide any benefit whatsoever to an attacker?"
I don't think I'm the "only person around here" who would argue that yes, it does. And that if you're taking the closed-source route, like this project's author, you can't provide copies of your source code to one specific attacker when they ask. If you do that, you're _definitely_ worse off (from a security perspective) than the people in the open source camp. I'm sure the closed-source-superiority people would agree.
Seems like it would similarly be unethical for a local bakery to give the NSA a discount on cheesecake.
When the NSA asks you to help them do bad things, you say no. If you feel inspired to give them a cheesecake discount because of the good things they do, that is fine.
One should have zero impact, as I said, modern crypto algorithms do not depend on keeping the algorithm secret to maintain security. Implementation can absolutely be full of bugs that are incorrectly using crypto primitives though.
The other has a direct impact on security.
I don't think one blurs the line to the other, they're fundamentally different things.
If anything, this is further proof that you need to use crypto properly because it literally means someone with code in hands won't have any advantages in attempting to break that encryption.
To me anyway, someone willing to give source code to the NSA doesn't imply they'd be willing to do nefarious things. There's nothing inherently nefarious about giving the NSA source code.
That said, I can understand being skeptical, but people love to talk about how open source is more secure because it has eyeballs on it. But now we try to pull the "it's not secure because the source was given to the NSA"
It can't be both ways.