Open washing enables companies to capitalize on the positive perception of open source and open practices without actually committing to them. This can help improve their public image and appeal to consumers who value transparency and openness.

Saved you a click.

It annoys me so much, because it works.

There's more people who have a vague understanding that "open-source" is good than people who understand software licenses, and nevermind people who actually go to compile the supposedly-open-source software to see what's included.

And if multiple people tell you that LLaMA is open-source, at some point you're just gonna assume that's true rather than check the license/code yourself.

Hell, there's even absolute dickholes which post their own definition of "open-source" like they're the fucking OSI themselves: https://futo.org/open-source-definition/
But because a popular YouTuber is behind that scam, you now have fanboys putting into question whether the definition from the OSI, which literally coined the term by publishing the definition, is actually the correct one. Absolutely incredible.

Edit: While researching for the comment below, I found this page on the FUTO website, which says their open-source definition was just a very funny parody: https://futo.org/about/futo-statement-on-opensource/
Why they don't take that open-source definition offline then, or preface it with a disclaimer, I do not know. And I think their reasoning for the parody is shit, but make up your own mind.

Another major factor is that the EU AI Act provides special exemptions for "open source" models.

Aaah, that's why.

Go free (libre) software