One of the reasons why OBS got so popular compared to Xsplit is that it is free.

Interesting – Xsplit is reported as a $20K sponsor on the website: https://opencollective.com/obsproject#section-budget

(Scroll down to see the list of contributors.)

No better publicity than on your competitor’s website?

The OBS team has a very friendly relationship with XSplit folks, they're nice people and strive for a better product for all users.

Well, yes, it's Free Software, but at this quality level it is be totally fine to sell the ready-to-run binary at a cost.

This is a good example of why I like open source. If someone decides to pull a move like that it can be forked and the project can live on.

That mostly works if the owner isn't also the person doing most of the work on the project.

More to the point, it only works if the owner isn't the only person who is willing and able to maintain the project. Open licensing lets you maintain your own fork, but it doesn't by itself grant you the drive, general skill, and project-specific knowledge to do so.

Even then though, you can continue to keep using it as is and not have to worry about them doing some shady updates now that they sold out.

I feel compelled to point out that selling software isn’t “selling out”.

Indeed. And there's nothing wrong with charging for FL/OSS.