I think we read it differently. In my view this is as about as nice as one can be:
> We are keeping this version open-source, forever, ...
Here they are committing to keeping their existing Open Source around instead of taking their toys and go home.
> If this repo was full of contributions and other folks pitching in, this would be a different story, but it's not—which is totally fine and accepted.
I think they aren't asking for contributions to v2 but rather for contributions to v1 which they are committed to keeping Open Source. But even then they acknowledge that users are free to use it without contributing in any way.