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It's open source, but the license agreement prohibits using it in other projects. You can do it for your own personal builds, but not any published builds.
so, literally not open source by the OSI's definition, great
That's very false. There are other OSes with GrapheneOS code or forks of GrapheneOS.
Elements of it, perhaps, but things like the sandboxing are explicitly prohibited in other Android ROMs. Otherwise almost all custom ROMs would be using it, or some flavour of it.
And this terminology kind of tells me you don't really know the custom ROM scene.