If the free-to-play microtransaction-supported model is more financially appealing than allowing customers own a product, then anything that allows to enjoy and extend the game without Microsoft overseeing it and getting a cut (like open-source Java versions of the client and the server) is a liability. Chat reporting is to me clear evidence of Microsoft trying to justify further lock-up and ongoing subscription model. Next they will say because OSS allows bypassing or cheating the reporting they must close the source and limit mod API.
I would be fine if Microsoft continued to release the game as a separate, adult-rated but unlocked product for gamers who care (and charged for major updates, they will absolutely pay), while separately providing a locked platform stuffed with coins, marketplaces, walled garden for mods, corporate moderators, safety guarantees and whatever else for those who want an easy solution safe for children without adult oversight.
Not exactly on topic but what you say is funny. Minecraft Java has never been open source. Mods are done by decompiling the official jar, applying patches and recompiling back. I'm sure it's not explicitly allowed by whatever legalese surrounds MC.
This all goes for the one true Minecraft version, Java. Bedrock... they can keep it.
There are even mods that provide some sort of API and plugin system for other mods to use :)
Java edition still qualifies. Not sure for how much longer.