Yes it is. If code is public you can't necessarily use or copy the code (depending on the license) but there's nothing stopping you reading it and learning how it works and any secrets contained in it (e.g. information about future products).

There's a reason most proprietary software isn't "source available".

> If you sell a product which can regurgitate large parts of code who's licence doesn't allow it to be completely freely used and modified

Yes but they don't do that. I'm not sure why people are finding this so hard to understand.